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2007-09-14 BOD MeetingPUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING The Terrace Hotel Lakeland, FL 5 g September 14, 2007 AGENDA 10:00 am Call To Order John Litton, Chairperson Consent Agenda 1. Request Approval of May 17, 2007 Board Meeting Minutes 2. Request Approval of Treasurer's Report as of June 30, 2007 3. Ratify Election of Officers from May Board Meeting Any Board Member may request to have an item removed from the Consent Agenda and placed on the Regular Agenda for further discussion. Regular Agenda 4. Executive Director's Report A. Request Approval of Insurance Advisor's Contract B. Request Approval of General Counsel Contract C. Member Notices — Intent to Withdraw 5. Broker's Report A. Property Renewal 10/1/07 - 4/1/08 B. April 2008 Renewal Submission C. Florida Personal Injury Protection (PIP) 6. Insurance Advisor's Report 7. Legal Update A. Arthur J. Gallagher Entities Class Action Suit B. Automobile Take Home Policy Ross Furry, Executive Director Andy Cooper, World Risk Management Glenn Tobey, Tobey & Associates Donovan Roper, Esq. 8. Board Member Items John Litton, Chairperson A. Lee County Port Authority — Request to Withdraw 3/31/08 B. Location of Future Annual Conference Public Comment: State full name and address. Discussion must be limited to a maximum of five (5) minutes per person. Adjournment Luncheon immediately following PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING SEPTEMBER 14, 2007 CONSENT AGENDA SUMMARY 1. Request Approval of May 17, 2007 Board Meeting Minutes Background: Meeting Minutes attached 2. Request Approval of Treasurer's Report as of June 30, 2007 Background: Financial Reports Attached 3. Ratify Election of Officers from May Board Meeting At the May Board Meeting, the following were re- elected to serve 2 -year terms, commencing 10 -1 -07: Jeff Sutton — Vice Chairperson Jennifer Valdes — North Representative Robbie Chartier — South Representative Article 6.2. of the By -Laws states the Board shall, bi- annually select [officers] during the final quarter of each two -year term to serve during the subsequent two -year term. Therefore ratification is required at this meeting. Board Action: Approved Denied Deferred Other 1. BOARD MEETING MINUTES 5/17/07 PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING Hilton Beach Resort, Marco Island, FL May 17, 2007 MINUTES Attendance: Kathy Bennett, City of Avon Park; Susan Lee, Town of Belleair; Vivian Hunter, City of Belle Glade; Margaret Bosack, City of Brooksville; Ted Byrd, City of Clewiston; Linda Stilson, City of Crystal River; Paul Erickson, DeSoto County BOCC; Mike Sheppard, City of Eustis; Mary Ann Dotson, Glades County BOCC; Jennifer Valdes, City of Gulfport; Jane Long, Hardee County BOCC; Wayne O'Neal, Hendry County BOCC; John Minor, Highlands County BOCC; Martin Schless, City of Indian Rocks Beach; Nancy Beelman, Town of Kenneth City; Michael Boyle, City of LaBelle; Marcel Blais, Town of Lady Lake; John Litton, City of Lake Mary; Arlene Tuck, Town of Lake Placid, Pam Conner, Lee County Port Authority; Jacqueline Martin, Levy County BOCC; Jane O'Connor, Town of Longboat Key; Carol Rogers, City of Longwood; Melissa Arnold, City of Moore Haven, Jeff Sutton, City of New Port Richey; Steve Gailbreath, City of North Port, Donna Reynolds, City of Okeechobee; Robbie Chartier, Okeechobee County BOCC; Dan Hood, City of Oviedo, Derrek Moore, City of Pahokee, Shirley Dresch, City of Port Richey; David Drury, City of Punta Gorda, Mike Eastman, City of Sebring; Ron Graydon, South Florida Conservancy; Gary Behnke, City of St. Pete Beach; Lori Tucker, City of Tavares; Woody Hubbard, City of Temple Terrace; Terri Svendsen, City of Wauchula; Frank Gilbert, City of Winter Garden; Sharry Boldt, City of Zephyrhills Absent: City of Deltona, City of Fort Meade, Hamilton County BOCC, Holmes County BOCC, City of Lake Wales, City of Safety Harbor, Sarasota /Manatee Airport Authority, City of South Pasadena, Sun 'n Lake of Sebring Improvement District Chairperson John Litton called the meeting to order at 2:08 pm with a super majority present. Consent Agenda 1. Request Approval of March 9, 2007 Board Meeting Minutes. 2. Request Approval of Treasurer's Report as of March 31, 2007. Gary Behnke made a motion to approve the consent agenda. Carol Rogers seconded the motion and it was unanimously approved. Regular Agenda 3. RFQ Selection Committee Recommendation for Broker Services — Mr. Litton summarized the process taken following the Board's decision at the March meeting to initiate action in securing quotations for brokerage services. After advertising on DemandStar and AGRIP, six proposals were received. AON, Willis, and World Risk Management were selected for oral interviews and presentations were made to the Selection Committee on April 27th in Lakeland. The Committee unanimously recommended World Risk Management as broker. On May 10th the Executive Committee unanimously approved the recommendation to present for full Board approval. Steve Gailbreath made a motion to accept the recommendations of the Selection and the Executive Committees and name World Risk Management as the broker of record for PRM. Ron Graydon seconded the motion and it was approved by majority vote with one opposed (Highlands County). 4. Executive Director's Report A. National PRIMA Conference — Mr. Furry advised that Safety National provided funding for PRM scholarships to the National PRIMA Conference, June 10 -13 in Boston. Scholarship recipients included: Phil Wickstrom, City of Punta Gorda; Jackie Sova, City of Lake Mary; Lisa Smith, City of LaBelle; Linda Stilson, City of Crystal River; Sharry Boldt, City of Zephyrhills; Steve Gailbreath, City of North Port; and Carol Rogers, City of Longwood. John Litton, Jeff Sutton, Jennifer Valdes and Robbie Chartier from the Executive Committee will also attend. B. Hurricane Claims Status — In reviewing the claims status, Mr. Furry advised there were no major outstanding issues. C. Actuarial Report and Financial Statements for FY Ending 9/30/06 — Reports were mailed to members under separate cover. D. Review of Member Premiums Due 10/1/07- 3/31/08 & Acknowledgment of Balance Due from Members — The Executive Director thanked members for returning the acknowledgment letter. E. Status of On -Site Property Appraisals — CBIZ plans to conclude all site visits by the end of June. F. Request Board Approval on Renewal of 5 -Yr. PRM Office Lease Agreement — Mr. Furry advised the current office lease expires August, 2007, and recommended a 5 -yr. extension with the same terms and conditions. The lease contains a 3% Cost of Living increase per year beginning 9/1/08. Dave Drury made a motion to approve renewal of the 5 -yr. PRM office lease agreement. Ms. Rogers seconded the motion and it was unanimously approved. G. Request Board Approval of 2007/08 Administrative Budget — The budget has an overall increase of 6% before the annual cost of the 2 Insurance Advisor. Although there was concern with the cost for the Insurance Advisor, consensus was that his knowledge and expertise are needed during the broker transition period. The proposed salary increase for staff is 6 %. The Executive Committee unanimously endorsed a salary increase of 8% for the Executive Director after their review of 28 evaluations. His overall performance was excellent. Nancy Beelman requested voting be done by show of hands rather than voice on future motions. Mike Boyle made a motion to approve the 2007/08 Administrative Budget. Ms. Chartier seconded the motion and it was approved by majority vote with one opposed (Indian Rocks Beach). 5. Request Approval on Changes to By -Laws - Mr. Furry advised that, in moving the program to an April 1st renewal date, By -Laws changes are needed to reflect the date when members can give notice to withdraw from the Pool and the date for providing the confirming notice to finalize their intent to withdraw. Following is a recap of each change: Page 1, 1St Paragraph — BE IT KNOWN THAT: The proposed change corrects Florida Statutes Sections 768.28(15) to read Florida Statutes Sections 768.28(16)(a). Article 2 — Definitions and Purpose Amended wording will place the Loss Fund on a policy year rather than fiscal year. Amended wording will add Policy Year to Definitions and Purpose. Article 3 — Powers and Duties Amendment to Article 3.1.6. — Adds language that allows and identifies that PRM has the power to purchase any insurance, i.e., reinsurance, excess property, excess WC, excess liability, pollution, boiler & machinery, etc., approved by the Board. Amendment to Article 3.1.8. — Correct Florida Statutes Section 768.28(14) to (16). Article 4 — Participation and Term Amendment to Article 4.2. Notice of Withdrawal — Change fiscal year to policy year. Amendment to Article 4.3. Actual Withdrawal /Required Withdrawal — Change fiscal year to policy year. Change final notice date from August 15 to February 15. Change the date to expel a member from August 1 to February 1 as described in Article 17. 3 Article 9 — Finances and Risk Management Pool Amendment to Article 9.2.Budget — Change fiscal year to policy year. Change date to adopt a final budget from August 1 to February 1 to coincide with policy year. Amendment to Article 9.4. Budget Amendments — Change fiscal year to policy year. Article 10 — Excess insurance Amendment to Article 10.4. Losses — Change fiscal year to policy year. Article 11 — Obligations of Members Amendment to Article 11.1.7.1. — Change date to November 1 and change fiscal year to policy year. Article 14 — Settlements Amendment to Article 14.1 Settlement/Advance Notice — Change settlement amount from $5,000 to $10,000. Mr. Boyle made a motion to approve the By -Laws changes. The motion was seconded by Wayne O'Neal and it was approved by majority vote with one opposed (Lee County Port Authority). In moving the date for giving notice to withdraw from the Pool from October 1 to April 1, a determination was needed by the Board on how to proceed with those members submitting their intent to withdraw as of 10/1/08. Today's approved changes to the By -Laws require members to remain in the Pool until 4/1/09. A motion was made by Mr. Drury that any member who gives notice to withdraw from the Pool, their notice will be effective for the April 1, 2009 policy periods. Mr. Boyle seconded the motion and it was approved by majority vote with two opposed (Lee County Port Authority and City of Clewiston). 6. Broker's Report A. Property Proposal for 10/1/07 thru 4/1/08 — Greg Butterfield was accompanied by Suzanne Brandt, CRC, and Mike Berend, RPS, to discuss a proposed extension of the property program to 4/1/08. The broker had incorrectly informed the Board at the March meeting that the Citizens Assessment Fee would not be charged. However, the proposal is an extension to the 2006 program, and the 6.84% Citizens fee would be assessed. With a 20% discount currently provided by the carriers, the total extension premium is $5,570,914 for $1.825 billion of 4 coverage, compared to $5,839,716 (10% discount) quoted at the March Board meeting. Coverage must be bound by June 1St, the start of hurricane season. Mr. Boyle made a motion to approve the extension of the property program from 10/1/07 to 4/1/08. Ms. Beelman seconded the motion. Discussion determined that members' property would be undervalued as the premium was based on the schedule of values submitted to underwriters in March 2006. Mr. Boyle and Ms. Beelman rescinded their motion and second, respectively. Mr. Zega made a motion to bind coverage up to March 31' and to purchase $2 billion of property coverage now to cover the Pool for any inflation of property values. Mr. Boyle seconded the motion for discussion purposes. The Executive Director was concerned with the allocation of the additional coverage to each member. Mr. Butterfield advised the premium would increase accordingly for any additional purchased coverage. Mr. Boyle withdrew the second to the motion to purchase $2 billion of property coverage. For lack of a second, the motion died. At the Chairman's request for the Executive Director's recommendation, Mr. Furry suggested finalizing appraisal values and then proceed in contacting the market to negotiate a 10/1/07 to 4/1/08 renewal. This will align property with the other areas of coverage for a 12 -month renewal on 4/1/08 to 4/1/09. 7. Insurance Consultant's Report — Glenn Tobey advised the loss ratio is 46% after seven months and the Board had made the correct decision to fund $15 million for the Loss Fund with $1.5 million in reserves. The Loss Fund comprises 43% of the total insurance costs. Mr. Tobey indicated there is substantial capacity in the property market and, if there are no hurricanes, rate reductions should also be forthcoming. A small increase is anticipated in Workers' Compensation. Audits will be performed on Workers' Compensation and Boiler & Machinery policies this year. For budget purposes, an overall 10% increase for the program is estimated. Mr. Tobey advised he will begin working diligently with World Risk Management in contacting the property market for the 10/1/07 renewal. 8. Election of Officers — Mr. Litton advised that the terms for Vice Chairperson, North and South Representatives expire 9/30/07. Incumbents Jeff Sutton, Jennifer Valdes, and Robbie Chartier submitted their willingness to continue serving in their respective capacities. No nominations were received from the floor. Mr. Boyle made a motion to elect Jeff Sutton as Vice Chairperson for the 2 -year term beginning 10/1/07. Mr. Graydon seconded the motion and it was unanimously approved. Mr. Drury made a motion to elect Jennifer Valdes as North Representative for the 2 -year term beginning 10/1/07. Mr. Boyle seconded the motion and it was unanimously approved. 5 Ms. Beelman made a motion to elect Robbie Chartier as South Representative for the 2 -year term beginning 10/1/07. Mr. Graydon seconded the motion and it was unanimously approved. 9. Executive Committee Report A. Executive Director Evaluation and Recommended Salary for FY 2007/08 — This item was covered with the approval of the 2007/08 Administrative Budget [Item 4.G.). Upon the recommendation of the Executive Committee, the Board approved an 8% salary increase for the Executive Director for FY 2007/08. 10. Safety Performance Awards — Butch Darab, Loss Control Consultant, Mr. Furry and Mr. Litton presented awards to the following members who have made significant safety achievements during the past year: Vehicle Safety Awards: City of Moore Haven, Sun 'n Lakes of Sebring Improvement District, Town of Belleair, City of Lake Placid, City of Okeechobee, City of Fort Meade, City of Avon Park, Lee County Port Authority, Highlands County BOCC Best Overall Safety Record: Under 100 employees — South Florida Conservancy 100 -200 employees — City of Lake Mary 200 -300 employees — City of New Port Richey 300+ employees — Highlands County BOCC Most Improved Safety Performance: Under 100 employees — City of LaBelle 100 -200 employees — City of Avon Park 200 -300 employees — Glades County BOCC 300+ employees — Levy County BOCC 11 Legal Update — Mr. Roper advised that Arthur J. Gallagher's brokerage contract with PRM expires on June 9th. He recommended a date be entered into the record establishing World Risk Management as broker for PRM. A motion was made by Mr. Sutton for World Risk Management, LLC to begin brokerage services for PRM effective May 17, 2007. The motion was seconded by Ms. Rogers, and it was unanimously approved. Mr. Roper provided copies of the United States Supreme Court's opinion on high speed police pursuits for interested members. Guidelines for Movable Soccer Goal Safety were distributed and Mr. Roper encouraged members to pass this information on to their Parks & Recreation 6 Departments. Movable soccer goals must be securely anchored to prevent serious injuries or deaths from goal tipover. 12. Board Member Items A. Establish Board Meeting Dates for 2008 Mike Sheppard made a motion to approve the dates for the 2008 Board Meetings, locations to be determined. Susan Lee seconded the motion and it was approved by majority vote with one opposed (City of LaBelle). The 2008 Board Meetings will be held on: February 15, 2008 May 9, 2008 August 8, 2008 November 14, 2008 There was no public comment. Meeting adjourned at 3:54 p.m. Respectfully submitted, Susan M. Baron in the absence of Judith A. Hearn Assistant Executive Director Secretary to PRM Board O:Uudy \BD MTGS\Board of Directors Meeting 5 -17 -07 7 MAY 17, 2007 @ 2:00 PM Avon Park, City of Belleair, Town of Belle Glade, City of Brooksville, City of Clewiston, City of Crystal River, City of Deltona, City of DeSoto County BOCC Eustis, City of Fort Meade, City of Glades County BOCC Gulfport, City of Hamilton County BOCC Hardee County BOCC Hendry County BOCC Highlands County BOCC Holmes County BOCC PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIREC 1 RS MEETING MARCO ISLAND, FLORIDA 101100 Bennett V � Sarah Adelt J. P. Murphy • Vivian Hunter Steve Baumgartn Ted Byrd in a Stilson Faith Miller Susan Lee Diana Hughes Laurie Lindsey Clyde P Jerry Hill Paul Erickson Mike Sheppard Phyllis Kirk Robert Giesler aides Ann Isaacs Raymon Thomas Monty Merchant Indian Rocks Beach, City of Kenneth City, Town of LaBelle, City of Lady Lake, Town of Lake Mary, City of Lake Placid, Town of Lake Wales, City of Lee County Port Authority Levy County BOCC Longboat Key, Town of Longwood, City of Moore Haven, City of New Port Richey, City of North Port, City of Okeechobee, City of Okeechobee County BOCC Oviedo, City of Pahokee, City of tl■. Martin c less Nancy Marcel Blai itton Arlene Tuck Bert Valery Muriel H. Whitman Lisa Smith Bill Vance J�queline Soya /JA,P Phil Williams Dawn Jackson Maxine Brantley /e€M LCiAi G,}Cei Steve Gailbreath Sherry Bq gsdorf U James Kirk George Legg 14,/ 2700( Dan Hood Port Richey, City of Punta Gorda, City of Safety Harbor, City of Sarasota/Manatee Airport Authority Sebring, City of South Florida Conservancy South Pasadena, City of St. Pete Beach, City of Sun n' Lake of Sebring Tavares, City of Temple Terrace, City of Wauchula, City of Winter Garden, City of Zephyrhills, City of Shirley Dresch Phil Wickstrom Bill Cropsey Martin Lange Pam Ziegler. Dav d D iry Alan Zimmet John Schussler t/ \1 Crissy Bublitz Woody Hub dr Stephanie Sparkenbaugh Mike Bonfield Lo Tn tIcker Holbrook Terri Svendsen Peggy Carpenter Rick Moore GUESTS / ADDITIONAL ATTENDEE SIGN IN SHEET ♦ ♦ ♦ + MAY 17, 2007 Signature Name Entity / Company 2. TREASURER'S REPORT AS OF 6/30/07 PUBLIC RISK MGMT OF FL BALANCE SHEET JUNE 30, 2007 CURRENT ASSETS PETTY CASH $ 75.00 OPERATING -SO TRUST 36,761,311.09 A/R MEMBERSHIPS 1,147,821.47 A/R TRADE 93.46 A/R - PRM GR HLTH 136,869.21 A/R CONSULTANT FEE - MEMBERS 3,714.91 A/R- REINSURANCE RECOVERIES (11,758,023.86) A/R OTHER 2,254.66 A/R -STATE W/C ASSESSMENT (157,509.05) A/R- APPRAISALS 767.00 A/R - ADDITIONAL INSURANCE 501.21 A/R - SCHOLARSHIP PROGRAM 8,300.00 DUE FROM MEMBERS 1,629,185.00 STATE ADMIN. FUND 13,782,293.24 TOTAL CURRENT ASSETS 41,557,653.34 PROPERTY AND EQUIPMENT FURNITURE & FIXTURES 32,847.12 LESS: ACCUM. DEPRECIATION (28,937.41) OFFICE MACHINES & EQUIPMENT 70,465.12 LESS: ACCUM. DEPRECIATION (33,581.88) AUTOMOBILE 116,538.79 ACCUMULATED DEPRECIATION (28,240.17) TOTAL PROPERTY & EQUIPMENT 129,091.57 OTHER ASSETS PREPAID INSURANCE 8,802,855.66 PREPAID FLOOD INSURANCE 94.49 PREPAID EXPENSES 24,634.79 DEFER MEMBER CONTR- 1987 -89 216,361.62 DEFER MEMBER CONTR - 1989 -90 295,679.00 DEPOSITS 5,665.06 TOTAL OTHER ASSETS 9,345,290.62 TOTAL ASSETS $ 51,032,035.53 LIABILITIES ACCOUNTS PAYABLE $ 15,477.80 A/P - GALLAGHER/RISX -FACS (2,709,223.06) FEDERAL TAXES PAYABLE (40.14) A/P EMP LIFE INS (195.81) A/P - OTHER 4,840.49 A/P - LOSS PREVENTION 14,933.73 ACCRUED VACATION 41,121.55 DEFERRED REVENUE 93,542.46 ADVANCE FROM REINSURER 4,914,159.95 CLAIMS PAYABLE - 1987 -89 74,378.32 CLAIMS PAYABLE - 1990 -91 17,384.32 CLAIMS PAYABLE - 1991 -92 4,610.39 CLAIMS PAYABLE - 1992 -93 (35,452.95) CLAIMS PAYABLE - 1993 -94 46,015.76 CLAIMS PAYABLE - 1994 -95 8,906.55 CLAIMS PAYABLE - 1996/97 30,983.44 CLAIMS PAYABLE - 1997/98 (170,028.49) CLAIMS PAYABLE - 1998/99 (50,897.81) CLAIMS PAYABLE - 1999/00 (234,272.10) CLAIMS PAYABLE - 2000/01 (313,238.24) CLAIMS PAYABLE - 2001/02 (782,112.55) CLAIMS PAYABLE - 2002/03 1,353,916.41 CLAIMS PAYABLE - 2003/04 (1,536,976.56) CLAIMS PAYABLE - 2004/05 3,146,683.12 CLAIMS PAYABLE - 2005/06 2,112,444.21 CLAIMS PAYABLE - 2006/07 9,223,579.23 NONCURRENT CLAIMS PAYABLE (10,529,837.00) SUSPENSE - CLEARING ACCOUNT 10,529,837.00 TOTAL LIABILITIES CAPITAL FUND BALANCE REVENUE IN EXCESS OF EXPENSE TOTAL CAPITAL TOTAL LIABILITIES & CAPITAL PUBLIC RISK MGMT OF FL BALANCE SHEET JUNE 30, 2007 25,847,604.32 9,913,891.19 15,270,540.02 35,761,495.51 $ 51,032,035.53 PUBLIC RISK MGMT OF FL INCOME STATEMENT FOR THE NINE MONTHS ENDING JUNE 30, 2007 CURRENT MONTH YEAR TO DATE REVENUES MEMBERSHIP ASSESSMENTS $ 4,288,509.34 $ 35,674,692.54 INTEREST INCOME 223,555.01 1,916,614.36 TOTAL REVENUES 4,512,064.35 37,591,306.90 EXPENSES OFFICERS' SALARIES 9,603.88 93,574.83 OFFICE SALARIES 38,692.16 377,248.56 PAYROLL TAXES 3,953.05 36,011.54 EMPLOYEE RETIREMENT BENEFITS 10,005.11 53,832.45 HEALTH INSURANCE - OFFICER 1,409.09 12,681.81 HEALTH INSURANCE - OFFICE 9,234.90 83,440.17 LIFE INSURANCE- OFFICER 77.50 697.50 LIFE INSURANCE- OFFICE 160.58 1,445.22 LTD INSURANCE 958.05 8,487.94 LEGAL FEES 873.37 9,690.73 LEGAL -PRE- DEFENSE 841.00 1,406.75 AUDIT FEES 0.00 27,200.00 ACTUARIAL STUDY 0.00 14,138.00 APPRAISAL FEE EXPENSE 0.00 2,750.00 AUTO EXPENSE 319.69 5,323.00 TRAVEL EXPENSE 3,920.15 56,128.42 ASSOCIATION MEMBERSHIPS 0.00 624.00 DUES & SUBSCRIPTIONS 0.00 1,637.00 EDUCATION/TRAINING /CONFER. 7,529.68 15,898.09 OFFICE LEASE 6,010.67 54,096.03 JANITORIAL / CLEANING 280.00 2,571.00 OFFICE /COMPUTER EQUIPMENT 1,500.00 28,552.20 TELEPHONE 1,364.43 14,663.41 COPY MACHINE LEASE 203.00 1,932.90 REPAIRS & MAINT. - EQUIPMENT 0.00 1,162.00 OFFICE SUPPLIES 1,719.66 12,413.05 NEWSLETTER 0.00 1,665.00 POSTAGE 652.01 8,170.60 PRINTING 392.20 392.20 INSURANCE - FLOOD /GENERAL 0.00 1,000.00 LOSS PREV EQUIP & SUPPLIES (4,124.36) 11,213.66 MARKETING & PROMOTION 0.00 5,162.69 MEETING EXPENSE 0.00 9,324.91 MISCELLANEOUS EXPENSE 340.29 3,487.99 GALLAGHER MGMT FEES 97,579.75 878,217.75 GALLAGHER EXCESS INSURANCE 1,591,074.92 14,319,674.28 CLAIMS EXPENSE 1,250,000.00 11,250,000.00 INSURANCE CONSULTANT 18,166.67 271,500.03 TOTAL EXPENSES 3,052,737.45 27,677,415.71 REVENUE IN EXCESS OF EXPENSE $ 1,459,326.90 $ 9,913,891.19 SALARY RELATED EXPENSES OFFICERS' SALARIES OFFICE SALARIES PAYROLL TAXES EMPLOYEE RETIREMENT BENEFITS HEALTH INSURANCE- OFFICER HEALTH INSURANCE - OFFICE LIFE INSURANCE - OFFICER LIFE INSURANCE - OFFICE LTD INSURANCE TOTAL SALARY RELATED EXPENSES PUBLIC RISK MGMT OF FL EXPENSES TO BUDGET FOR THE Nine MONTHs ENDING June 30, 2007 MONTHLY MONTHLY Y -T -D Y -T -D TOTAL YEAR ACTUAL BUDGET ACTUAL BUDGET BUDGET 9,603.88 10,404.17 93,574.83 38,692.16 41,916.42 377,248.56 3,953.05 3,968.67 36,011.54 10,005.11 4,549.42 53,832.45 1,409.09 729.67 12,681.81 9,234.90 9,842.83 83,440.17 77.50 74.92 697.50 160.58 149.33 1,445.22 958.05 937.92 8,487.94 74,094.32 72,573.35 667,420.02 93,637.53 377,247.78 35,718.03 40,944.78 6,567.03 88,585.47 674.28 1,343.97 8,441.28 653,160.15 124,850.00 502,997.00 47,624.00 54,593.00 8,756.00 118,114.00 899.00 1,792.00 11,255.00 870,880.00 GENERAL EXPENSES LEGAL FEES 873.37 500.00 9,690.73 4,500.00 6,000.00 LEGAL -PRE- DEFENSE 841.00 416.67 1,406.75 3,750.03 5,000.00 AUDIT FEES 0.00 2,416.67 27,200.00 21,750.03 29,000.00 ACTUARIAL STUDY 0.00 1,166.67 14,138.00 10,500.03 14,000.00 APPRAISAL FEE EXPENSE 0.00 458.33 2,750.00 4,124.97 5,500.00 AUTO EXPENSE 319.69 250.00 5,323.00 2,250.00 3,000.00 TRAVEL EXPENSE 3,920.15 2,500.00 56,128.42 22,500.00 30,000.00 ASSOCIATION MEMBERSHIPS 0.00 166.67 624.00 1,500.03 2,000.00 DUES & SUBSCRIPTIONS 0.00 266.67 1,637.00 2,400.03 3,200.00 EDUCATION/TRAINING /CONFER. 7,529.68 2,500.00 15,898.09 22,500.00 30,000.00 OFFICE LEASE 6,010.67 6,010.75 54,096.03 54,096.75 72,129.00 JANITORIAL / CLEANING 280.00 300.00 2,571.00 2,700.00 3,600.00 OFFICE /COMPUTER EQUIPMENT 1,500.00 1,500.00 28,552.20 13,500.00 18,000.00 TELEPHONE 1,364.43 2,166.67 14,663.41 19,500.03 26,000.00 COPY MACHINE LEASE 203.00 250.00 1,932.90 2,250.00 3,000.00 REPAIRS & MAINT. - EQUIPMENT 0.00 166.67 1,162.00 1,500.03 2,000.00 OFFICE SUPPLIES 1,719.66 1,166.67 12,413.05 10,500.03 14,000.00 NEWSLETTER 0.00 333.33 1,665.00 2,999.97 4,000.00 POSTAGE 652.01 1,000.00 8,170.60 9,000.00 12,000.00 PRINTING 392.20 166.67 392.20 1,500.03 2,000.00 INSURANCE - FLOOD /GENERAL 0.00 250.00 1,000.00 2,250.00 3,000.00 LOSS PREV EQUIP & SUPPLIES (4,124.36) 1,833.33 11,213.66 16,499.97 22,000.00 MARKETING & PROMOTION 0.00 375.00 5,162.69 3,375.00 4,500.00 MEETING EXPENSE 0.00 2,008.33 9,324.91 18,074.97 24,100.00 MISCELLANEOUS EXPENSE 340.29 208.33 3,487.99 1,874.97 2,500.00 TRAINING /SEMINAR PRESENTATION 0.00 500.00 0.00 4,500.00 6,000.00 WEB SITE MAINT. 0.00 566.67 0.00 5,100.03 6,800.00 TOTAL GENERAL EXPENSES 21,821.79 29,444.10 290,603.63 264,996.90 353,329.00 TOTAL OPERATING EXPENSES 95,916.11 102,017.45 958,023.65 918,157.05 1,224,209.00 PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING SEPTEMBER 14, 2007 REGULAR AGENDA SUMMARY Executive Director's Report Ross Furry, Executive Director A. Request Approval of Insurance Advisor's Contract Mr. Tobey's present contract expires September 30th. During the broker transition, he has provided valuable assistance and his knowledge and expertise greatly benefit the Pool during renewal negotiations. The fee for Mr. Tobey's services was established at $216,000 annually, or $18,000 per month, and included in the 2007/08 Administrative Budget that was approved at the May Board Meeting. The Executive Director and Executive Committee request approval to retain Mr. Tobey's services for the fiscal year 10/1/07-08. Attachment: Contract Board Action: _Approved Denied Deferred Other 03/23/2006 03:45 2397689107 GALLAGHER PAGE 111 AGREEMENT FOR PROFESSIONAL SERVICES OF AND BETWEEN GLENN R. TOBEY: INSURANCE ADVISOR AND " PRM" — PUBLIC RISK MANAGEMENT OF FLORIDA This Agreement made the 10`" day of March, 2006, by and between, Public Risk Management of Florida (hereinafter "Client ") and Glenn R. Tobey, a Florida Licensed Insurance Agent (hereinafter "Insurance Advisor "). WITNESSETH That in consideration of the mutual covenants and agreements passed at the March 10, 2006 Board Meeting, the parties hereto agree as follows! 1) The Client does hereby employ and retain the Insurance Advisor for and during the period commencing from April 1, 2006 to September 30, 2006, a period of six months, for the provision of advising Client on all Property and Casualty Insurance matters, including but not limited to, claims adjusting involvement. This is to include all relevant meeting and discussions with insurance companies and existing insurance broker, including, but not limited to, all other outside agencies and/or companies and/or corporations. The Insurance Advisor accepts such employment and retainer and agrees to render and perform all services necessary and proper for the continued structure and interests of the Client to the extent required by Client and agreed to by the Insurance Advisor and designated as responsibilities to be assumed by Insurance Advisor. 3) The Client shall pay the Insurance Advisor as compensation for the services to be performed as herein described, the sum of $120,000.00 for a six month period of time. The Client shall pay a deposit of $20,000.00 on or before April 1, 2006 upon the execution of this Agreement and additional payments of $20,000.00 will be paid monthly on or before the 1" day of each month commencing on April 1, 2006. Payments to be made April, May, June, July and August, 2006. The Client may cancel the Agreement at any time with a 60 day written notice to the Insurance Advisor. The Client and Insurance Advisor agrees that no other compensation shall be paid. In witness whereof, the parties hereto have hereunto set their hand and seal the day and year first written above. Glenn R. Tobey Insurance Advisor 411 7//e4 Ross Furry G� / Executive Director Public Risk Management of Florida ADDENDUM TO AGREEMENT FOR PROFESSIONAL SERVICES DATED MARCH 10, 2006 1) Indemnification. "Insurance Advisor agrees to indemnify, hold harmless and provide a legal defense to Client from any and all claims, losses, actions, causes of action, judgments, awards, costs, damages or exposures arising out of Insurance Advisor's services and/or activities conducted pursuant to the Agreement for Professional Set-vices dated March 10, 2006, due in whole or in part to the actions and/or omissions of the Insurance Advisor, or due in whole or in part to the actions and/or omissions of employees, representatives, agents or servants of Client, or due to the sole negligence of either part to said Agreement for Professional Services." 2) Professional liability insurance. "Insurance Advisor agrees and covenants to have in place at all times pertinent to the Agreement for Professional Services dated March 10, 2006 a policy of professional liability insurance providing either Errors and Omissions, or Directors and Officers, professional liability insurance coverage for Insurance Advisor in an amount which is not less than $500,000.00, and furthermore to furnish Client with a Certificate of Insurance listing Public Risk Management of Florida as an additional insured for said policy of professional liability insurance." 3) Jurisdiction/governing law /venue. "The parties hereto agree that any and all disputes, litigation, arbitration or other controversies shall be controlled and governed by the laws of the State of Florida, and that jurisdiction and venue of any and all such disputes, litigation, or arbitration shall be limited to Lee County, Florida." Glenn R. Tobey Insurance Advisor 8767 Esplande, Unit 33 Orlando, FL 32819 SS# 348 -44 -0723 �/Z 7 Date Ross Fu Executive Director Public Risk Management of FL Date PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING SEPTEMBER 14, 2007 REGULAR AGENDA SUMMARY Executive Director's Report continued Ross Furry, Executive Director B. Request Approval of General Counsel Contract The representation agreement with Roper & Roper, P.A. as PRM General Counsel expires September 30, 2007, or as may be extended by mutual consent of the parties. The agreement contains a monthly retainer base attorney's fee of $750.00. The Executive Director and Executive Committee request approval to retain the legal services of Roper & Roper, P.A. through September 30, 2008. Attachment: Contract Bo rd Action: Approved Denied Deferred Other C. Member Notices - Intent to Withdraw 9/30/07: City of Brooksville City of Deltona — final notification received 8/3/07 to withdraw Hamilton County BOCC City of Indian Rocks Beach — verbal /will remain with PRM City of Winter Garden — rescinded notice 3/22/07 4/1/09: City of Avon Park City of Clewiston (�J REPRESENTATION CONTRACT THIS REPRESENTATION AGREEMENT (hereinafter the "Agreement ") is made and entered into by and between PUBLIC RISK MANAGEMENT OF FLORIDA, INC. (PRM), and the law firm of ROPER & ROPER, P.A., a Florida Professional Association. WITNESSETH: WHEREAS, ROPER & ROPER, P.A. is a professional association made up of attorneys duly licensed, authorized, and admitted to practice the profession of law in the State of Florida, and WHEREAS, PRM desires to retain the legal services and representation of ROPER & ROPER, P.A. and its attorneys for a period beginning on October 1, 2006 to September 30, 2007, upon and subject to the following terms and conditions, and WHEREAS, the parties desire to reduce to writing their agreements herein, and NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter contained, the parties do hereby mutually covenant and agree with each other as follows: 1. PRM. does hereby retain ROPER & ROPER, P.A. for a period beginning October 1, 2006 and ending on September 30, 2007, or as may be extended by mutual consent of the parties. 2. During the term of this Agreement, it is agreed that ROPER & ROPER, P.A. shall represent PRM. in all the legal matters which PRM deems, in its sole discretion, may require the services of ROPER & ROPER, P.A., except for those matters that (a) ROPER & ROPER, P.A. may have a conflict of interest, or (b) are outside of ROPER & ROPER, P.A.'s area of expertise, in which either event and at the request of PRM, ROPER & ROPER, P.A. will assist PRM in securing competent legal counsel for any such matter. 3. ROPER & ROPER, P.A. agrees to devote a sufficient amount of its time and the time of its lawyers to adequately, properly and promptly represent PRM in connection with and as required by the legal matters for which PRM requires ROPER & ROPER, P.A.'s services during the term of this Agreement. 4. For the time period of October 1, 2006 through September 30, 2007, ROPER & ROPER, P.A. shall be compensated by PRM for all legal services rendered, with the exception of those services and matters identified in paragraph 5 below and also excluding any out -of- pocket costs addressed in paragraph 7 and 8 below, a monthly retainer base attorney's fee of Seven Hundred Fifty and No /100 Dollars, ($750.00), which shall be due and payable on the first of each month. 5. In addition to the monthly base retainer fee due ROPER & ROPER, P.A., under paragraphs 3 and 4 above, PRM shall compensate ROPER & ROPER, P.A. at the rate of $125.00 per hour for all attorney time rendered in connection with any litigation and/or arbitration defended or pursued on behalf of PRM. which is not covered by its insurance, with the exception of property damage subrogation actions pursued or prosecuted on behalf of PRM and ROPER & ROPER, P.A. For any litigation defended or pursued by ROPER & ROPER, P.A. on behalf of PRM that is covered by its insurance, ROPER & ROPER, P.A. -2- shall be compensated by PRM's insurance carrier for all attorney time at a rate of $ 125.00 per hour or such other rate as negotiated between ROPER & ROPER, P.A. and said insurance carrier, plus all expenses and costs incurred in connection with such litigation. This paragraph, and Representation C ontract, does not apply to property damage subrogation claims or lawsuits which ROPER & ROPER, P.A. pursue or prosecute on behalf of PRM. 6. Subject to the terms of paragraph 5 of this Agreement, ROPER & ROPER, P.A., shall provide PRM with monthly statements for each matter undertaken by ROPER & ROPER. P.A., which shall reflect all services rendered for each matter, as well as ROPER & ROPER, P.A.'s contemporaneous, actual and accurate time records for all legal services rendered pursuant to this Agreement. These statements may be used by parties from time to time to reevaluate the amount of the monthly base retainer fee paid to ROPER & ROPER, P.A. 7. In addition to the monthly base retainer fee due ROPER & ROPER, P.A. under paragraphs 3 and 4 above, PRM shall pay for all expenses, fees and costs incurred to retain the services of expert witnesses, court reporters, process service, clerk fees and other expenses incurred to pay filing fees with various judicial and administrative agencies in connection with any arbitration, judicial, administrative or other claims brought on behalf of PRM or against PRM. Prior to any expenditure being made in excess of $100.00, and where time reasonably permits, ROPER & ROPER, P.A. agrees to obtain approval from PRM, including all computer research. All necessary computer research shall be reimbursed at -3- $25.00 per daily research session, regardless of the number of minutes researched per daily research session. 8. In the event ROPER & ROPER. P.A. is required to institute or defend any legal action or arbitration proceeding on behalf of PRM which results in its entitlement to recover attomey's fees in the proceeding or action, PRM shall be entitled to first be reimbursed by the losing party for all hourly attorney's fees, costs and expenses incurred in connection with such action or arbitration. 9. If any dispute or controversy between the parties arises out of or relates to this Agreement, through breach thereof, or any performance or obligation due hereunder, and if the dispute cannot be settled through direct negotiation, the parties agree first to try in good faith to settle the dispute by mediation to be administered by the Florida Rules of Civil Procedure governing mediations. The parties shall mutually agree on a qualified, experienced mediator located in Lee County, Florida. 10. Any controversy or claim arising out of or relating to this Agreement, the breach thereof, or the parties rights and obligations arising hereunder, not settled at mediation, shall be resolved and determined by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgement on the award rendered by three (3) arbitrators shall be entered in any court having jurisdiction thereof. The administrative costs of the American Arbitration Association shall be borne equally by the parties and each party shall bear its own costs and expenses associated with -4- any such arbitration under this provision. 11. Venue for any and all legal actions and arbitration proceedings arising out of or relating to this Agreement, the breach thereof or the parties rights and obligations arising hereunder, shall exclusively lie in Lee County, Florida. This Agreement and the parties rights and obligations due hereunder are governed by the laws of the State of Florida. 12. The parties agree that, during the first year of this Agreement, it may only be terminated for good cause after 30 days prior written notice. Thereafter, this Agreement may be terminated with or without good cause upon 30 days prior written notice. In the event either party terminates this Agreement at any time, with or without cause, all attorney's fees, costs and expenses due ROPER & ROPER, P.A. shall be paid in full prior to the effective date of termination. 13. This Agreement is the entire agreement of the parties, and no other agreement or modification on this contract, expressed or implied, shall be binding on either party unless same shall be in writing and signed by both parties. This Agreement may not be orally modified. Any modification must be in writing, expressly titled a modification or addendum to this contract, attached to this contract, and signed by both parties. 14. This Agreement shall be binding upon the parties successors and assigns. 15. Any waiver of any breach or violation of either party's obligations under this Agreement shall not be construed as a continuing waiver or consent to any subsequent breach or violation. -5- 16. This Agreement has been fully negotiated in an arm's length transaction and it shall not be construed against either party. Each party has had the opportunity to employ independent legal counsel and seek the advice from such counsel with respect to this Agreement, its obligations, terms and implications. Neither party has relied upon the other party prior to signing this Agreement. IN WITNESS WHEREOF, the parties hereto have caused their hands and seals to be affixed hereon this 1 S day of , 2006. ROPER & ROPER, P.A. By: Donovan A. Roper, P 's' dent PUBLIC RISK MANAGEMENT OF FLORIDA, INC By: Ross Furry, E P'e Director PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING SEPTEMBER 14, 2007 REGULAR AGENDA SUMMARY 6. Insurance Advisor's Report Glenn Tobey, Tobey & Associates 7 Legal Update Donovan Roper, Esq. A. Arthur J. Gallagher Entities Class Action Suit Several PRM members received a notice of proposed Class Action Settlement with A. J. Gallagher entities regarding Insurance Brokerage Antitrust Litigation. To participate in the settlement, a Claim Form must be submitted on or before November 16, 2007. The attached memo outlines important considerations for the Board's decision on whether or not to proceed. It is Legal Counsel's recommendation that PRM opt into the Class Action Settlement. Board Action: Approved Denied Deferred Other B. Automobile Take Home Policy It is the opinion of Legal Counsel that the PRM Coverage Document provides for automobile liability, garagekeepers legal liability and automobile no -fault claims involving "take home" vehicles owned by the PRM Member. With regard to automobile medical payments and uninsured /underinsured motorist coverages, the same is specifically excluded. See attached memo. 7.A. AJG ENTITIES CLASS ACTION SUIT Donovan A. Roper, Esquire Teresa S. Roper, Esquire Andrew I. Dayes, Esquire Heather A. Macre, Esquire Sophia E. Langley, Esquire* * Of Counsel Cynthia A. Todd, Paralegal Paula Sontos, Paralegal ROPER & ROPER, P.A. ATTORNEYS AT LAW 116 N. Park Avenue Apopka, Florida 32703 July 31, 2007 Mr. Ross Furry PRM, Executive Director 3434 Hancock Bridge Parkway, Suite 203 N. Ft. Myers, FL 33903 RE: Arthur J. Gallagher Entities Class Action Suit Dear Ross: Telephone: (407) 884 -9944 Facsimile: (407) 884 -4343 E -Mail: email @roperandroper.com Web: www.roperandroper.com Satellite Offices in Palatka, Florida In follow up to my previous correspondence and conversations with you concerning the class action suit involving the Arthur J. Gallagher Entities (hereinafter "AJG "), I wanted to provide you with additional information which may be relevant and of use during PRM's Board of Director's (hereinafter the "Board ") decision - making process. To aid in that process, I have enclosed herein the copies ofthe following documents: (a) a Summary Notice Form; (b) a Claim Form; (c) a Plan of Allocation (as amended); and (d) a Summary of Release. Additional forms, information and updates regarding this suit are available at www.gallaghersettlement.com. Upcoming Deadline As the Board considers this matter, it should be aware of an approaching deadline with regard to this suit. In order to participate in the suit, Claim Forms such as that enclosed with this correspondence must be completed and postmarked no later than November 16, 2007. The Claim Form can be downloaded by visiting the above - referenced Mr. Ross Furry RE: AJG Entities Class Action Suit July 31, 2007 Page 2 website, where a link for the form will be found on the website's left side. The Claim Form must be mailed to the following address: Gallagher Insurance Brokerage Antitrust Settlement c/o Complete Claim Solutions, LLC P.O. Box 24749 West Palm Beach, FL 33416 It is important to note that each claim requires its own Claim Form — copies of the form may not be utilized by additional claimants. As you can see from your review of the example Claim Form enclosed herein, I have redacted that form's individual number and bar code to avoid its use by multiple members. It includes, and requires, the following information certified by an officer or director of the entity empowered to execute such legally binding documents on behalf of the entity (depending on whom the claimant is): (a) the name of the insurance company; (b) the policy number and year of inception or renewal; and (c) the premium paid. Important Considerations As part of its decision making process, I would like the Board to weigh three (3) particularly important considerations regarding this class action suit. I. Claim Form First, the Board should consider what would be required of each claimant to submit a claim. As noted above, each claimant must submit its own Claim Form. Including instructions and endnotes, the Claim Form is comprised of five (5) pages and seeks action and / or information from each claimant the following parts of the Claim Form: (I) claimant identification; (II) claims on commercial insurance; (III) employer's claims on employee benefits policies; (IV) employee's claims on employee benefits policies; (V) notice to employees; and (VI) certification of the claim. Mr. Ross Furry RE: AJG Entities Class Action Suit July 31, 2007 Page 3 II. Plan of Allocation Second, the Board should consider the potential for recovery. Under the current Plan of Allocation as Amended on May 11, 2007, the potential recovery of PRM and its members (that obtained ancillary coverages through AJG) will be apportioned from 68% of the $28,000.000.00 in settlement proceeds, i.e., $19,040,000.00 as "Commercial Direct Claimants. "' The amounts to each of the Commercial Direct Claimants will be calculated by dividing the premiums paid by each claimant for the applicable policies by the total premiums paid by all claimants for the applicable policies. While there remains no way to determine the "total amount of premiums paid by all claimants," an investigation into the total amounts paid by PRM and its members during those periods should provide us with some insight into the amount of money that may be recoverable. III. Release of Claims As a third consideration, the Board must be aware that a claimant who participates in the claim will, as of the Effective Date,' be deemed to have released all Released Claims. It is important that the Board understands what comprises the term "all Released Claims." Stated as simply as possible, all "Released Claims" means any and all claims arising out of any conduct, events or transactions alleged against AJG in this "contingency commission," i.e., monetary kick -back suit which includes alleged violations of federal and state antitrust laws, the Racketeer Influenced and Corrupt Organizations Act, and common law. Those violations are alleged to have arisen out of: (a) certain insurers providing quotations to policyholders and prospective policyholders through certain brokers in connection with the Commercial Class Claimants are defined by the Notice of Proposed Class Action Settlement as "all Settlement Class Members that made a Commercial Settlement Class Policy purchase during the period of August 26, 1004 through December 21, 2005 engaging the services of a Gallagher Entity." Please see page 8 of the Notice of Proposed Class Action Settlement for additional categories of Claimants that may or may not be applicable to FICURMA and its members. 2 "Effective Date" means the date on which the Final Judgment and Order Approving Settlement becomes final and no longer subject to appeal. Mr. Ross Furry RE: AJG Entities Class Action Suit July 31, 2007 Page 4 placement and renewal of insurance contracts; and (b) contracts, agreements, arrangements and understandings about the payment of commissions to brokers that are contingent upon, among other things, a broker placing a particular number of policies or dollar value of premium with the insurer. Moreover, the Corrected First Consolidated Amended Commercial Class Action Complaint (hereinafter the "Complaint ") alleges that AJG was involved in improper contingent commission agreements, improperly steered clients based upon contingent commission agreements to maximize profits, and conspired to centralize broking services. The key to the Board's consideration should be what is not included within the term "Released Claims." It does not include claims to enforce the contractual terms of insurance or reinsurance issued by insurers, or pending claims, cases, litigation or demands (if any) related to: (a) securities fraud; (b) derivative litigation; or (c) claims on behalf of beneficiaries of employee benefit plans sponsored by AJG. It is my position that, with the possible exception of ancillary coverages for PRM's members, you or I could file the necessary forms on behalf of all members. As to ancillary coverages it may very well be necessary for the PRM member to file its own Claim Form. The claim forms will all have to be signed, though, by an authorized director or officer of each PRM member. Status of the Claim AJG has filed a motion to dismiss the Plaintiffs' claims and Plaintiffs have filed motions to certify the Class Action. As of the date of the Notice, the Court denied in part the motions to dismiss but has not yet decided the motions to certify. Without regard to how the Court rules on the motions pending before it, if the Gallagher Settlement is approved, the Court will not make any determination as to the merits of Plaintiffs' claims against AJG or AJG's defenses to those claims. The Notice that members received does not imply that there has been or would be any finding of violation of the law, or that any relief or recovery would be awarded against Gallagher if the claims against it were not settled, nor does the Notice imply that Gallagher could have successfully defended Mr. Ross Furry RE: AJG Entities Class Action Suit July 31, 2007 Page 5 the claims. The settlement is merely a vehicle to ensure a resolution and to provide benefits to the Settlement Class Members. If approved by the Court (and such approval becomes final), the Gallagher Settlement will resolve and dismiss with prejudice all claims that have been made or that could have been made in the Class Action as to Gallagher. A hearing was held on July 24, 2007, in order to determine the adequacy of the proposed settlement with AJG and related matters described above. At the conclusion of the hearing the Court stated that it would take the final approval motion under advisement. Of course, should we learn of a decision and an Order is issued, we will immediately obtain a copy of same and forward to you. I hope that this correspondence will provide the Board with assistance as it considers this important matter. I recommend that PRM opt into this Class Action settlement. Of course, should you have any additional questions, comments or concerns regarding this consideration. As always, I remain DAR/AID Enclosures cc: Susan Baron John Litton Jeff Sutton Robbie Chartier Mike Sheppard Jennifer Valdes in erel 0-62.- DONOVA t . ROPER UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY In re: INSURANCE BROKERAGE ANTITRUST LITIGATION APPLIES TO ALL ACTIONS In re EMPLOYEE BENEFIT INSURANCE BROKERAGE ANTITRUST LITIGATION APPLIES TO ALL ACTIONS ) Civil Action No. 2:04 -cv -5184 and ) 2:05 -CV -1079 (GEB) MDL No. 1663 Hon. Garrett E. Brown, Jr. ) ) ) ) ) ) PLAN OF ALLOCATION AS AMENDED On December 29, 2006, the Gallagher Defendants,' and the Plaintiffs in the actions entitled In re: Insurance Brokerage Antitrust Litigation, MDL No. 1663, Civil Nos. 04 -5184 and 05 -1079 (GEB), pending in the United States District Court for the District of New Jersey (the "Action ") entered into the Stipulation of Settlement between Class Plaintiffs and Arthur J. Gallagher & Co. Defendants (the "Stipulation "), subject to approval of the Court. The Stipulation proposes to settle the claims of Plaintiffs and the Settlement Class2 against the The Gallagher Defendants are: Arthur J. Gallagher & Co., Arthur J. Gallagher Risk Management Services, Inc., and Gallagher Benefit Services, Inc. 2 "Settlement Class" and "Settlement Class Members" are defined as all individuals or entities within the "Commercial Class" or the "EB Class ". The "Commercial Class" is defined as all individuals or entities who, had a Commercial Settlement Class Policy Purchase (defined below in footnote 4), provided further that the Settlement Class does not include: (a) such individuals or entities who submit valid and timely requests for exclusion from the Settlement Class in accordance with the procedures set out in Section 8.1 of the Stipulation of Settlement between Class Plaintiffs and Arthur J. Gallagher & Co., as amended (the "Gallagher Settlement Agreement "); (b) such individuals or entities who settled an actual or threatened lawsuit or other proceeding with the Gallagher Defendants, or any of them, and released a Gallagher Defendant from any further claims concerning their Settlement Class Policy Purchase (defined below in footnote 5); (c) such individuals or entities who have elected to receive monetary payments pursuant to the Illinois Regulatory Settlements (as defined in the Gallagher Settlement Gallagher Entities.3 Agreement) provided however, that such individuals or entities who have elected to receive monetary payments pursuant to the Illinois Regulatory Settlements shall be Settlement Class Members respecting their Settlement Class Policy Purchases that are not eligible to receive relief under the Illinois Regulatory Settlements, with respect to which the Gallagher Defendants shall waive enforcement of the release provided in the Illinois Regulatory Settlements (the "Regulatory Release ") to the extent that such individuals or entities participate in the Settlement Class with respect to such purchases, provided further that the Gallagher Defendants reserve the right to enforce the Regulatory Release in its entirety as to any individuals or entities who has elected to receive monetary payments pursuant to the Illinois Regulatory Settlements to the extent such individual or entities seeks relief from the Gallagher Defendants outside of the Gallagher Settlement Agreement for Settlement Class Policy Purchases that are not eligible to receive relief under the Illinois Regulatory Settlements for Commercial Class Policy Purchases; (d) such individuals or entities who are named Defendants in the Action (including their officers and directors); (e) any individuals or entities in which the Gallagher Defendants, or any of them, has or had a controlling interest during the period August 26, 1994 through December 31, 2005 (the "Class Period ") and their legal representatives, heirs, executors, successors or assigns of any such excluded individuals or entities; and (f) any director or officer of the Gallagher Defendants, or any of them, during the Class Period (the "Excluded Persons "). The "EB Class" is defined as all individual or entities within the "Employer Class" or the "Employee Class ". The "Employer Class" is defined as all individuals or entities that: (a) were employers providing employee benefits insurance pursuant to a plan governed by ERISA, exclusive of Excluded Persons; or (b) were employers, including governmental or religious employers, or associations or groups of individual or entities providing employee benefits insurance, exclusive of Excluded Persons; and (c) have paid in full or in part for an EB Settlement Class Policy Purchase (defined below in footnote 5). The "Employee Class" is defined as all individual or entities that: (a) were employees in the United States receiving employee benefits insurance from a plan governed by ERISA, exclusive of Excluded Persons; and/or (b) were employees, including governmental or religious employees or members of associations or groups providing employee benefits insurance, exclusive of Excluded Persons; and (c) have paid in full or in part for an EB Settlement Class Policy Purchase. ' The "Gallagher Entities" are: AJG Canada ULC; AJG Capital, Inc.; AJG Chem Mod Holdings LLC; AJG Coal, Inc.; AJG Coal Indiana LLC; AJG Financial Services, Inc.; AJG Investments, Inc.; AJG North America ULC; AJG Two Pierce, Inc. (Delaware); Artex Insurance Company Ltd; Artex Risk Solutions, Inc.; Artex Underwriting Managers Ltd.; Arthur J. Gallagher; Arthur J. Gallagher & Co.; Arthur J. Gallagher & Co. (Bermuda) Limited; Arthur J. Gallagher & Co. (Canada) Ltd.; Arthur J. Gallagher & Co. (Florida); Arthur J. Gallagher & Co. (Illinois); Arthur J. Gallagher & Co. — Greenville; Arthur J. Gallagher & Co. - Little Rock; Arthur J. Gallagher & Co. Insurance Brokers of California, Inc.; Arthur J. Gallagher & Co. of Kentucky, Inc.; Arthur J. Gallagher & Co. of Mississippi, Inc.; Arthur J. Gallagher & Co. of New York, Inc.; Arthur J. Gallagher & Co. of Tennessee, Inc.; Arthur J. Gallagher Brokerage and Risk Management Services, LLC; Arthur J. Gallagher Intermediaries (Bermuda) Limited; Arthur J. Gallagher Management (Bermuda) Limited; Arthur J. Gallagher Risk Management Services, Inc.; Arthur J. Gallagher Service Co. (Delaware); Arthur J. Gallagher (UK) Limited; Arthur J. Gallagher Middle East BSC(c); Arthur J. Gallagher Asia Pte Ltd.; Arthur J. Gallagher Asia Limited; Arthur J. Gallagher (L) BBD; Arthur J. Gallagher Australasia Holdings Pty. Ltd.; Arthur J. Gallagher Reinsurance Australasia Pty Ltd; Arthur J. Gallagher (Aus) Pty Ltd.; Australis Group (Underwriting) Pty Ltd.; Aviacargo Leasing Limited; Charity First Insurance Services, Inc.; C.W. Excess, Inc.; Commonwealth Premium Finance Corporation; Connor Hale Kerslake Limited; Edwin M. Rollins Company; Gallagher Bassett Services, Inc. (Delaware); Gallagher Bassett of New York, Inc.; Gallagher Bassett International Ltd. (UK); Gallagher Bassett Canada Inc.; Gallagher Basset Services Pty Ltd; Gallagher Bassett International S.A.; Gallagher Benefit Services, Inc.; Gallagher Captive Services (Cayman) Limited; Gallagher Healthcare Insurance Services, Inc.; Gallagher Healthcare Insurance Services of Kansas City, LLC; Gallagher Holdings Bermuda Company Limited; Gallagher Holding (UK) Limited; Gallagher Lambert Group; Gallagher Loss Control Services, Inc.; Gallagher Re, Inc.; Gallagher Re Limited; GBS Administrators, Inc.; GBS Insurance and Financial Services, Inc.; GBS Retirement Services, Inc.; Interpacific Underwriting Agencies Pty Ltd.; Lamberson Koster & Co.; Manning & Smith Insurance, Inc.; MRS Holdings Limited; Morgan Read & Sharman Limited; Protected Insurance Company; Risk Management Partners Ltd.; Risk Placement Services, Inc. (Illinois); Risk Placement Services of Arizona, Inc.; Risk Placement Services of Arkansas, Inc.; Risk Placement Services of Louisiana, Inc.; Risk Placement Services of Massachusetts, Inc.; Risk Placement Services of Nevada, Inc.; Risk Placement Services of New York, Inc.; Risk Placement Services of Pennsylvania, Inc.; Risk Placement Services of 2 Pursuant to the Stipulation, $28 million plus accrued interest (the "Fund ") will be distributed to Settlement Class Members in accordance with the Plan of Allocation ( "Claimants ") summarized below. SETTLEMENT CLASS CLAIMANTS The Plan of Allocation provides for six separate claimant groups of Settlement Class Members as follows: 1. All Settlement Class Members that made a Commercial Settlement Class Policy Purchase4 during the period August 26, 1994 through December 31, 2005 engaging the services of a Gallagher Entity (the "Commercial Direct Claimants "); 2. All Employer Class Members that paid in full or in part for an EB Settlement Class Policy Purchases engaging the services of a Gallagher Entity (the "Employer Direct Claimants "); Texas, Inc.; Scholastic Risk Services Limited; Sobieski & Bradley of Nevada, Inc.; Strand Underwriting Limited; Western Litigation, Inc.; and Wyatt Gallagher Bassett Workers Compensation Victoria Pty Ltd. a "Commercial Settlement Class Policy Purchase" means the purchase or renewal of commercial insurance, or reinsurance thereof; obtained through engaging the services of the Gallagher Defendants or any Commercial Broker Defendant (described below in footnote 6) where the coverage under such commercial insurance, or reinsurance thereof incepts or renews during the Class Period pursuant to a contract, policy, agreement, arrangement or understanding where the commercial insurance, or reinsurance thereof (a) involved an insured or policyholder thereof, any of which was either domiciled in or resident in, or had any other significant contact with, the United States, its territories or possessions; (b) involved a contract, policy, agreement, arrangement or understanding entered into in the United States, its territories or possessions; (c) involved a contract, policy, agreement, arrangement or understanding subject to federal law or to the law of any of the states of the United States, its territories or possessions; or (d) provide coverage for an insurable exposure in the United States, its territories or possessions. 5 "EB Settlement Class Policy Purchase" means the purchase or renewal of employee benefits insurance, or reinsurance thereof, obtained through engaging the services of the Gallagher Defendants or any EB Broker Defendant (defined below in footnote 7) where the coverage under such employee benefits insurance, or reinsurance thereof incepts or renews during the Class Period pursuant to a contract, policy, agreement, arrangement or understanding where the EB insurance, or reinsurance thereof (a) involved an insured or policyholder thereof, any of which was either domiciled in or resident in, or had any other significant contact with, the United States, its territories or possessions; (b) involved a contract, policy, agreement, arrangement or understanding entered into in the United States, its territories or possessions; (c) involved a contract, policy, agreement, arrangement or understanding subject to federal law or to the law of any of the states of the United States, its territories or possessions; or (d) provide coverage for an insurable exposure in the United States, its territories or possessions. "Settlement Class Policy Purchase" means a Commercial Settlement Class Policy Purchase and/or an EB Settlement Class Policy Purchase. 3 3. All Employee Class Members that paid in full or in part for an EB Settlement Class Policy Purchase engaging the services of a Gallagher Entity (the "Employee Direct Claimants "); 4. All Settlement Class Members that made a Commercial Settlement Class Policy Purchase engaging the services of a Commercial Broker Defendant6 and not through a Gallagher Entity (the "Commercial Conspiracy Claimants "); 5. All Employer Class Members that paid in full or in part for an EB Settlement Class Policy Purchase engaging the services of an EB Broker Defendant and not through a Gallagher Entity (the "Employer Conspiracy Claimants "); and 6. All Employee Class Members that paid in full or in part for an EB Settlement Class Policy Purchase engaging the services of an EB Broker Defendant and not through a Gallagher Entity (the "Employee Conspiracy Claimants "). ALLOCATION OF THE FUND The Fund will be allocated as follows: 6 "Commercial Broker Defendants" are: Marsh & McLennan Companies, Inc.; Marsh Inc.; Marsh USA, Inc.; Marsh USA Inc. (Connecticut); Seabury & Smith, Inc.; Aon Corporation; Aon Broker Services, Inc.; Aon Risk Services Companies, Inc.; Aon Risk Services, Inc. U.S.; Aon Risk Services of Maryland; Aon Risk Services, Inc. of Louisiana; Aon Risk Services of Texas, Inc.; Aon Risk Services, Inc. of Michigan; Aon Group Inc.; Aon Services Group, Inc.; Aon Re, Inc.; Affinity Insurance Services, Inc.; Aon Re Worldwide, Inc.; Willis Group Holdings Limited; Willis Group Limited; Willis North America, Inc.; Willis of New York, Inc.; Willis Re Inc.; Stewart Smith Group; Wells Fargo & Company; Acordia, Inc.; Brown & Brown, Inc.; Hilb, Rogal & Hobbs Company; BB &T Corporation; Branch Banking and Trust Company; BB &T Insurance Services, Inc.; Hub International Limited; U.S.I. Holdings Corporation; USI Insurance Services of Florida, Inc. (d/b /a USI Florida); Summit Global Partners of Florida, Inc.; and any other broker that is added as a defendant in the Action prior to the time that the Notice is mailed. "EB Broker Defendants" are: Acordia, Inc.; Aon Corporation; Aon Consulting, Inc.; Aon Broker Services, Inc.; Aon Risk Services Companies, Inc.; Aon Risk Services Inc. U.S.; Aon Group, Inc.; Aon Services Group, Inc.; Aon Re, Inc.; BB &T Corporation; BB &T Insurance Services, Inc.; Benefits Commerce; Brown & Brown, Inc.; Brown & Brown Insurance Benefits, Inc.; Frank F. Haack & Associates; Hilb Rogal & Hobbs Company; HUB International Limited; Marsh & McLennan Companies, Inc.; Marsh Inc.; Marsh USA, Inc.; Mercer, Inc.; Mercer Human Resource Consulting LLC; Mercer Human Resource Consulting of Texas, Inc.; O'Neill, Finnegan & Jordan Insurance Agency, Inc.; Seabury & Smith, Inc.; Talbot Financial Corporation; Universal Life Resources, ULR Insurance Services, Inc.; USI Holdings Corporation; USI Consulting Group; USI Insurance Services Corporation; Wells Fargo & Company; Willis Group Holdings Limited; and Willis North America, Inc. 4 Claimant Allocable Fund Percentage Commercial Direct Claimants 68.0% Employer Direct Claimants 3.6% Employee Direct Claimants 13.3% Commercial Conspiracy Claimants 13.2% Employer Conspiracy Claimants 0.5% Employee Conspiracy Claimants 1.4% To the extent that Claimants have Settlement Class Policy Purchases acquired through one of the Gallagher Entities and other Settlement Class Policy Purchases acquired through a Broker Defendant other than one of the Gallagher Entities, it may submit separate claims pertaining to these policies. CALCULATIONS OF CLAIMANTS' DISTRIBUTABLE AMOUNT The Court has authorized the retention of Complete Claim Solutions, LLC ( "CCS ") as the Settlement Administrator. CCS will calculate the distribution for each Settlement Class Member within each of the groups of Claimants described above. For each group of Commercial Claimants, the distributable amount from the Allocable Fund will be calculated by dividing the premium paid by each Claimant for the applicable policies by the total of premiums paid by all Claimants for the applicable policies. No Commercial Conspiracy Claimant can recover a higher percentage of the premium paid than the percentage amount recovered by any Commercial Direct Claimant. To the extent that any of the Fund allocable to the Commercial Conspiracy Claimants is not distributed, that remaining amount shall be reallocated to the Commercial Direct Claimants. For each group of Employer or Employee Claimants, a Coverage Factor will be calculated for each Claimant for each year based upon the number and type of benefit policies 5 acquired during that year. In calculating the Coverage Factor, the following Point Scales will be used ( "Allocation Points "): Type Point Scale Dental 4.0 Health 24.4 Life 1.0 Long -term Disability 1.3 Short-term Disability 1.3 Vision 1.1 Values for 1994 will be multiplied by 33% to reflect the fact that the Class Period covers only one -third of that year. For Employers, the Coverage Factor for each year will be multiplied by the number of covered employees in that year. The sum of each Claimant's Coverage Factors for all years in the Class Period shall represent its Allocation Points for the purpose of determining distributions. For each of the four Claimant groups (Employer Direct Claimants, Employee Direct Claimants, Employer Conspiracy Claimants and Employee Conspiracy Claimants), a Claimant's distributable amount from the Allocable Fund will be calculated by dividing its Allocation Points by the Allocation Points of all Claimants within that group. No Employer Conspiracy Claimant can recover a higher percentage of its Allocation Points than the percentage amount recovered by any Employer Direct Claimant. To the extent that any of the Fund allocable to the Employer Conspiracy Claimants is not distributed, that remaining amount shall be reallocated to the Employer Direct Claimants. No Employee Conspiracy Claimant can recover a higher percentage of its Allocation Points than the percentage amount recovered by any Employee Direct Claimant. To the extent that any of the Funds allocable to the Employee Conspiracy Claimants is not distributed, that remaining amount will be reallocated to the Employee Direct Claimants. DATED: May 11, 2007 6 i RESPONSE DUE DATE Postmarked By NOVEMBER 16, 2007 GALL 11/81/41Malli PLEASE NOTE: It you area Settlement pass Member (see Notice paragraph 4), you must complete this Claim Form for each eydIble policy and mall it to the address listed below In order to participate In the settlement for such policies This Claitn Form must be postmarked by November 16, 2007, Generally, an.eligible policy is either (i) a policy purchased or renewed during the period August 26, 1994 through December 31, 2005 (the "pass Period") where any related broker, administrative, advisor or claim services were provided by Gallagher or (ii) you purchased or renewed an insurance policy from any insurer during the Class Period through any of the Broker Defendants described at paragraph 2 of the Notice other than Gallagher, Please refer to paragraph 4 of the Notice for a more detailed explanation as to who Is a Settlement Class Member. If you have questions as to whether you are a Settlement Class Member, you can contact the Settlement Administrator at 1.866 - 459.3650 or visit tyVvw.rrafia,$tersettktmnntala. CLAIM DOCUMENTATION INSTRUCTIONS FOR PARTS I, 11, III AND IV: 1. ALL CLAIMANTS: Complete the Claimant Identification in Part I, 2. COMPANY CLAIMANTS; a. In the appropriate blanks in Part It and Part 01, 011 in the names and addresses of any Gallagher Entity brokers ce other Defendant Brokers that placed coverage for you during the Class Period (see endnotes for the identities of these brokers); b. For claims on commercial policies, enter the Policy Information (insurance company, policy number, year of inception or renewal and premium paid) in Part II; c. For r claims o on n Pemployee III; e f� policies, enter the number of covered employees per year and indicate by an T the types of insurance provided d. Every employee benefits claimant must check one of two boxes indicating that either (a) d has posted a notice to its employees indicating that they may be eligible to make a claim, or (bl the entity making the claim is rho longer in business. (Part V, page 5) 3. EMPLOYEE CLAIMANTS: a. Fill in the name of your employer in Part N; and b. Indicate. by an 'T' the benefit or benefits you received and contributed to each year in Part N. 4. Please provide the required information for each entity and /or broker(s) for each year from August 26, 1994 through December 31, 2005 inclusive. S. Sign the Certification (Part VI, page 5) at the end of this form, 6. YOU MUST MAX YOUR COMPLETED AND SIGNED PROOF OF CLAIM TD THE SETTLEMENT ADMINISTRATOR POSTMARIED BY NOVEMBER !B, 2007. en The Settlement Administrator is authorized to request, from persons or entities submitting this Claim Form, any documentation necessary to verity all information appearing in the Claim Form or to prevent consideration of duplicate claims submitted by or on behalf of a Settlement Class Member, Failure b provide such information in response to such request may constitute grounds for rejection of the Claim Fort. PART I — CLAIMANT IDENTIFICATION; (Please print or type) Q' Please check the box at the left U the street address entered below Is different from the address printed on the mailing page. 1111111E 11111i111111111111f111 Company/Organization Name Street Address* Name / Title City State Zip Code ( ) Area Code Telephone Number Company FEIN / Last 4 digits of SSN if filing individually © CD Y 1"111Mi Men by November 16, 2007 to: Gallagher Insurance Brokerage Antitrust Senlement, c/o Complete Claim Solutions, LLC, P.O. Box 24749, West Palm Beach. EL 33416 1 PART II — CUIMS ON COMMERCIAL INSURANCE & COMMERCIAL INSURANCE YOU PURCHASED THROUGH A GALLAGHER ENTITY', it applicable: (Please print or type) Name of Gallagher Entity that placed your policy �— l Area Code Telephone Number Nune mber (Refer to endnote 1, page 5, for list of Gallagher Entities) Street Address City POLICY INFORMATION: (Please print or type) Insurance Policy year** gym' Number: Year Premium — — Paid S State Zip Code Insurance Policy *� ConanY` Number; Year Premium Paid $ Insurance Policy Conant Number Year ** Premium Paid $ Year ** Premium Paid S Year ** Premium Paid $ Year ** Premium Paid $ Instance Policy Company` Number: Insurance Policy Cony` Number: Insurance ComPanY: +* (Inception/Renewal) Policy Number: B. COMMERCIAL INSURANCE YOU PURCHASED THROUGH COMMERCIAL BROKER DEFENDANTS' OTHER THAN A GALLAGHER ENTITY', N applicable: (Please print or type) Name of Commercial Broker Defendant that placed your coverage (Refer to endnote 2, page 5, for list of Commercial Broker Defendants) ( ) Area Code Telephone Number Street Address City State by Code POLICY INFORMATION: (Please print or type) Insurance Policy ** I�nany: Number: Year Premium Paid S Insurance Policy CoMPallYi Number: Year** Premium Paid $ Insurance Policy Company: Number: Year** Premium Paid $ Insurance Policy ComPanY: Number: Year ** Premium Paid $ Insurance Policy Company` Number. Year ** Premium Paid $ Insurance Policy Company: Number: Year** Premium Pald $ ** (Inception/Renewal) Um require additional space, attach extra copies of o 40. ) , .sue; , ,,:. nn Sign and print your name on each additional page. Mail by November 16, 2007 to: Gallagher Insurance Brokerage Antitrust Settlement, c/o Completelutions, LLC, P.O. Box 24749, West Palm Beach, PL 33416 2 PART Ill — >:AdPLOYER t`;AIMANT ONLY: CLAIMS ON EMPLOYEE BENEFITS POLICIES A. EMPLOYEE BENEFITS INSURANCE YOU PURCHASED THROUGH A GALLAGHER ENTITY', if applicable: (please print or type) Name of Gallagher business that placed your coverage (Rehr to emote t, page 5, for Ost of 6altao te/ Entities) Street Address C tv Area Code Telephone Number htstracttons: Please fiIf in the number of covered em.I. ees per ear and indicate with an "X" each of co�� rip Code *Covered E ,1 s Dental B. EMPLOYEE BENEFITS INSURANCE YOU PURCHASED THROUGH EB BROKER DEFENDANTS' OTHER THAN A GALLAGNER ENTITY', it appif (Please print of type) Nam of EB Broker Defendant that placed your coverage (Refer to sndnote 3, page 5, for list of EB Broker Defendants) Street Address Area Code Telephone Number Qty State bp Code Inst/aedons: Please fill in the number of covered em.l. ees , : ear and indicate N you require additional space, attach extra copies e. Sign and print your name on each additional page. Mall by November 16, 1007 to: Gallagher Insurance Brokerage Antitrust Settlement, c/o Completeution LL.C, P.O. Box 24749, West Palm Beach, FL 33416 3 PART Iv— ,EMPLOYEE CLAIMANTS ONLT: CLAIMS ON EMPLOYEE BENEFITS POLICIES A. CLAIMS ON EMPLOYEE BENEFITS POUCIES PURCHASED BY YOU OR YOUR EMPLOYER THROUGH A GALLAGHER ENTITY', H applicable: Meier to endnete i, page 5, for list of Gallagher Entities) (Please print or type) Name of employer that provided your employee benefits Street Address 1994 1995 1996 Instructions: Please indicate Health ( ) Area Code City Telephone Number State Zip Code an "X" the benefit or benefits you received and contributed to each year. Dental Life 1 long Term Disability ' Short Term Disability 0. CLAIMS ON EMPLOYEE BENEFITS POUCIES PURCHASED BY YOU OR YOUR EMPLOYER THROUGH EH BROKER DEFENDANTS' OTHER THAN A GALLAGHER ENTUTY1, if applicable: (Refer to mutate 3, page 5, for list of Ell Broker Defendants) (Please print or type) Name of employer that provided your employee benefits Street Address City ( ) Area Code Telephone Nunter State Bp Code 1994 1995 1996 1997 1996 1999 2000 2001 2002 2003 2004 Instructions: Please indicate by an "X" the benefit or benefits you received and contributed to each year. Dental I life I long Term Disahgity Short Term Disability Health Vision 2005 J t ! 1 I If you require additional space, attach extra copies of Part IV in the same format as above. Sign and print your name on each additional page. Mail by November 16, 2007 to: Gallagher Ins —�lT�� P.O. wref err, Go Complete Claim Solutions, LLC, Box _47 4 PART V Al! emalovea Nine emaloYee benefits Claims must check one of the two boxes: ❑ 1 have posted notice to my employees that they may be eligible to make claims under this Setttemerd and informing them how to do so. [3 The entity that purchased the eligible employee Q R � pleyee benefits policies listed en this claim loan is no longer in business. PART VI — CERTIFICATION: t certify under penalty of perjury that the information above is true and correct and that the submission of false information may subject me to civil and/or criminal penalties. Signature: Print Name and Title: UQNOTfS 'The "Gallagher Entities" are: AJG Canada ULC; MG Capital, Inc.; MG Chem Mod Holdings LLC; A)G Coal, Inc.; AJG Coal Indiana LLC; MG Financial Services, Inc.; MG Investnents,1110.; AJG North America ULC; AJG Two Pierce, Inc. (Delaware); Artex Insurance Company Ltd; Arias Risk Solutions, Inc.; Alta Underwriting Managers Ltd.; Arthur J. Gallagher; Arthur J. Gallagher & Co.; Arthur J. Gallagher & Co. (Bermuda) Limited; Arthur J. Gallagher & Co. (Canada) Ltd.; Arthur J. Gallagher & Co. (Florida); Arthur 1. Gallagher & Co. (Illinois); Arthur J. Gallagher & Co. — Greenville; Arthur 1. Gallagher & Co. • Little Rock; Arthur L Gallagher & Co. Insurance Brokers of California, Inc.; Arthur J. Gallagher & Co. of Kentucky, Inc.; Arthur 1. Gallagher & Co. of Mississippi, Inc.; Arthur J. Gallagher & Co. of New York, Inc.; Arthur J. Gallagher & Co. of Tennessee, Inc.; Arthur 1 Gallagher Brokerage and Risk Management Services, LLC; Arthur). Gallagher Intermediaries (Bermuda) Limited; Arthur/. Gallagher Management (Bermuda) Limited; Arthur J. Gallagher Risk Management Services, Inc.; Arthur 1. Gallagher Service Co. (Delaware); Arthur J. Gallagher (UK) Limited; Arthur J. Gallagher Middle East BSC(c); Arthur J. Gallagher Asia Pis Ltd.; Arthur 1. Gallagher Asia Limited; Arthur J. Gallagher (1) 8110; Arthur J. Gallagher Australasia Holdings Pty. Ltd.; Arthur J. Gallagher Reinsurance Australasia Ply Ltd.; Arthur 1. Gallagher (Aus) Ply Ltd.; Australis Group (Underwriting) Pty Ltd.; Aviacargo Leasing Limited; Chart First Insurance Services, Inc.; C.W. Excess, Inc.; Commonwealth Premium Finance Corporation; Connor Hale Kerslake Limited; Edwin M. Rollins Company; Gallagher Bassett Services, Inc. (Delaware); Gallagher Bassett of New York, Inc.; Gallagher Bassett International Ltd. (UK); Gallagher Bassett Canada Inc.; Gallagher Basset Services Pty Ltd; Gallagher Bassett International S.A.; Gallagher Benefit Services, Inc.; Gallagher captive Services (Cayman) Untried; Gallagher Healthcare Insurance Services, Inc.; Gallagher Healthcare Insurance Services of Kansas City, LLC; Gallagher Holdings Bermuda Company Limited; Gallagher Holdings (UK) Limited Gallagher Lambert Group; Gallagher loss Control Services, Inc.; Gallagher Re, Inc.; Gallagher Re Limited; GBS Administrators, Inc.; GBS Insurance and Financial Services, Inc.; GBS Retirement Services, Inc.; Interpacihc Underwriting Agencies Pty Ltd.; Lamberson /Costar & Co.; Manning & Smith Insurance, Inc.; MRS Holdings Limited; Morgan Read & Sharman Limited; Protected Insurance Company; Risk Management Partners Ltd.; Risk Placement Services, Inc. (Illinois); Risk Placement Services of Arizona, Inc.; Risk Placement Services of Arkansas, Inc.; Risk Placement Services of Louisiana, Inc; Risk Placement Services of Massachusetts, Inc.; Risk Placement Services of Nevada, Inc.; Risk Placement Services of New York Inc.; Risk Placement Services of Penrtsyhania Inc.; Risk Placement Services of Texas, Inc.; Scholastic Risk Services limited; Sobieski & Bradley of Nevada, Inc.; Strand Underwriting Limited; Western litigation, Inc.; and WyettGallagher Bassett Workers Compensation Victoria Pty Ltd. "Commercial Broker Defendants" are: Marsh & Mclennan Companies, Inc.; Marsh Inc.; Marsh USA, Inc.; Marsh USA Inc. (Connecticut); Seabee( & Smith, Inc.; Aon Corporation; Aon Broker Services, Inc.; Aon Risk Services Companies, Inc.; Aon Risk Services, Inc. U.S.; Aon Risk Services Inc. of Maryland; Aon Risk Services, Inc. of Louisiana; Aon Risk Services of Texas, Inc.; Aon Risk Services, Inc. of Michigan; Aon Group, Inc.; Aon Services Group, Inc.; Aon Re, Inc.; Affinity Insurance Services, Inc.; Aon Re Waddwide, Inc.; Willis Group Holdings Limited; Willis Group Limited; Willis North America, Inc.; Willis of New York Inc.; Willis Re Inc.; Stewart Smith Group; Wells Fargo & Company; Acordia, Inc.; Brown & Brown, Inc.; Hilb Roger & Hobbs Company; BUT Corporation; Branch Banking and Trust Company; BB &T Insurance Services, Inc.; Hub International Limited; U.S.I. Holdings Corporation; USI Insurance Services of Florida, Inc. (d/gia UV Florida); Summit Global Partners of Florida, Inc. and any other broker that is added as a defendant in the Action prior to the time that the Notice is mailed. rE8 Broker Defendants" are: Acordia, Inc.; Aon Corporation; Aon Consulting Inc.; Aon Broker Services, Inc.; Aon Risk Services U.S.; Mn Group. Inc.; Aon Services Group, Inc.; Aon Re, Inc,; BR &T Corporation; RB&T insurance Services, Inc.; Benefits Commerce; Inc.; Brown, In Inc. Brown Insurance Benefits, Inc.; Frank F. Haack & Associates; Hifb Regal & Hobbs Company; Hub International Limited; Marsh & McLennan Companies, Inc.; Marsh Inc.; Marsh USA, Inc.; Mercer, Inc.; Mercer Human Resource Consulting LLC; Mercer Human Resource Consulting of Texas, Inc.; O'Neill, Finnegan & Jordan Insurance key, Inc.; Seabory & Smith Inc.; Talbot Financial Corporation; Universal Life Resources; ULR lnsurancp Services, Inc.; USI Holdings Corporation; L SI Consulting Group; U51 Insurance Services Corporation; Wells Fargo & Compan • Gr Noll tarNia North America, Inc. E -mail Address: Date: Mali by November 16, 2007 to: Gallagher Insurance Brokerage Antitrust Settlement, c%o Complete! Claim 'Satnions, LLC, P.0. Box 24749. West Palm Beach, FL 33416 5 The following is a summary of the Release. The full text of the Release can be found at Section 16 Stipulation of Settlement Between Class Plaintiffs and Arthur J. Gallagher & Co. Defendants, as amended (the "Settlement Agreement "). SUMMARY OF RELEASE Upon the Effective Date,I all Settlement Class Members2 and each of them on behalf of themselves, their heirs, executors, administrators, beneficiaries, predecessors, successors, affiliates, and assigns shall hereby be deemed to have, and by operation of law and the Final Judgment and Order Approving Settlement shall have, fully, finally, and forever, remised, released, relinquished, compromised and discharged all Released Claims3 against each and every one of the Releasees,4 Class Plaintiffs, Class Counsel and the Gallagher's Counsel, including such Released Claims as already have been, could have been or could be asserted in any pending litigation, arbitration or other proceeding whether formal or informal and whether or not any such Settlement Class Member submits any Proof of Claim Form or otherwise seeks any payment under the terms of the Settlement Agreement. All Releasorss covenant and agree that they shall not hereafter seek to establish liability against any Releasee based, in whole or in part, on any of the Released Claims. Upon the Effective Date, all Releasees, Class Plaintiffs, Class Counsel, Gallagher's Counsel and each of them on behalf of themselves, their heirs, executors, administrators, beneficiaries, predecessors, successors, affiliates and assigns, for good and sufficient consideration receipt of which is acknowledged, shall be deemed to have, and by operation of law and of the Final Judgment and Order Approving Settlement, shall have °fully, finally, and forever released, relinquished, settled, and discharged any and all Released Claims (including such Released Claims as have already have been, or could have been or could be asserted in any pending litigation, arbitration or other proceeding whether formal or informal). All Releasees covenant and agree that they shall not hereafter seek to establish liability against any Releasor based, in whole or in part, on any Released Claims. END NOTES "Effective Date" means the date on which the Final Judgment and Order Approving Settlement becomes final and no longer subject to appeal. 2 "Settlement Class Members" mean all persons within the "Commercial Class" or the "EB Class ". "Commercial Class" means all persons who, had a "Commercial Settlement Class Policy Purchase ", provided further that "Commercial Class" does not include: (a) such persons who submit valid and timely requests for exclusion from the Settlement Class in accordance with the procedures set out in Section 8.1 of the Settlement Agreement (Opt- Outs "); (b) such persons who settled an actual or threatened lawsuit or other proceeding with Gallagher, and released Gallagher from any further claims concerning their "Commercial Settlement Class Policy Purchase"; (c) such persons who have elected to receive monetary payments pursuant to the Illinois Regulatory Settlements (described at paragraph 16 of the Notice) provided however, that such persons who have elected to receive monetary payments pursuant to the Illinois Regulatory Settlements shall be Settlement Class Members respecting their Settlement Class Policy Purchases that are not eligible to receive relief under the Illinois Regulatory Settlements, with respect to which Gallagher shall waive enforcement of the release provided in the Illinois Regulatory Settlements (the "Regulatory Release ") to the extent that such persons participate in the Settlement Class with respect to such purchases, provided further that Gallagher reserves the right to enforce the Regulatory Release in its entirety as to any persons who have elected to receive monetary payments pursuant to Illinois Regulatory Settlements to the extent such persons seek relief from Gallagher outside of the Settlement Agreement for "Commercial Settlement Class Policy Purchases" that are not eligible to receive relief under the Illinois Regulatory Settlements; (d) any persons who are defendants in the Class Action (including their officers and directors); (e) any persons in which Gallagher has or had a controlling interest during the period August 26, 1994 through December 31, 2005 (the "Class Period ") and the legal representatives, heirs, executors, successors or assigns of any such excluded persons; and (f) any director or officer of Gallagher during the Class Period (the "Excluded Persons "). "EB Class" mean all persons within the "Employee Class" and /or the "Employer Class ". "Employee Class" means all persons that: (a) were employees in the United States receiving employee benefits insurance from a plan governed by ERISA, exclusive of Excluded Persons; and/or (b) were employees, including governmental or religious employees or members of associations or groups providing employee benefits insurance, exclusive of Excluded Persons; and (c) have paid in full or in part for an "EB Settlement Class Policy Purchase ". "Employer Class" means all persons that (a) were employers providing employee benefits insurance pursuant to a plan governed by ERISA, exclusive of Excluded Persons; or (b) were employers, including governmental or religious employers, or associations or groups of persons providing employee benefits insurance, exclusive of Excluded Persons; and (c) have paid in full or in part for an "EB Settlement Class Policy Purchase ". "Settlement Class Policy Purchase" means a "Commercial Settlement Class Policy Purchase" and /or `EB Settlement Class Policy Purchase ". "Commercial Settlement Class Policy Purchase" means all the insurance brokerage and any related administrative, advisory or claims services provided by Gallagher or any other Broker Defendants (described at paragraph 2 of the Notice) to any Settlement Class Member during the Class Period where the coverage or services incepts, begins or renews during the Class Period pursuant to a contract, policy, agreement, arrangement or understanding where the insurance or reinsurance: (a) involved an insured or policyholder thereof, any of which was either domiciled in or resident in, or had any other significant contact with, the United States, its territories or possessions; (b) involved a contract, policy, agreement, arrangement or understanding entered into in the United States, its territories or possessions; (c) involved a contract, policy, agreement, arrangement or understanding subject to federal law or to the law of any of the states of the United States, its territories or possessions; or (d) provide coverage for an insurable exposure in the Untied States, its territories or possessions. "EB Settlement Class Policy Purchase" means the purchase or renewal of employee benefits insurance or reinsurance thereof and related administrative, advisory or claims services obtained through engaging the services of Gallagher or any other Broker Defendant where the coverage or services under such employee benefit insurance, or reinsurance thereof incepts, begins or renews during the Class Period pursuant to a contract, policy, agreement, arrangement or understanding where the employee benefit insurance or reinsurance thereof: (a) involved an insured or policyholder thereof, any of which was either domiciled in or resident in, or had any other significant contact with, the United States, its territories or possessions; (b) involved a contract, policy, agreement, arrangement or understanding entered into in the United States, its territories or possessions; (c) involved a contract, policy, agreement, arrangement or understanding subject to federal law or to the law of any of the states of the United States, its territories or possessions; or (d) provided coverage for an insurable exposure in the United States, its territories or possessions. 2 3 "Released Claims" means any and all claims, demands, actions, suits, causes of action, damages whenever incurred, liabilities of any nature whatsoever, including costs, expenses, penalties and attorneys' fees, known or unknown, suspected or unsuspected, in law or equity, that any Releasors (defined below in end note 5) ever has, now has, or hereafter can, shall or may have, directly, or in any capacity, arising out of any conduct, events or transactions alleged against Gallagher, in the Class Action. Released Claims shall not include claims, whether known or unknown, of Settlement Class Members to enforce the contractual terms of insurance or reinsurance issued by an Insurer Defendant (described at paragraph 3 of the Notice) or pending claims, cases, litigation or demands (if any) related to (a) securities fraud, (b) derivative litigation or (c) claims on behalf of beneficiaries of employee benefit plans sponsored by Releasees (defined below in end note 4). All Releasors covenant and agree that, after the Effective Date, they shall not seek to establish liability based, in whole or in part, against any of the Releasees on any of the Released Claims. 4 "Releasees" mean the Gallagher Entities (described at paragraph 1 of the Notice) and their current and former parent corporations, predecessors, successors in interest, subsidiaries, divisions, affiliated or related entities, successors and assigns and each of their past and present directors, officers, employees and counsel for the Settlement Class and Gallagher. 5 "Releasors" means all Settlement Class Members who have not timely submitted an Opt -Out, as well as their successors, assigns, heirs, exeL uiors, trustees, parents, subsidiaries, divisions, partners, affiliates, present and former stockholders, officers, directors, employees and any future operating entities created and controlled by such a Settlement Class Member, and any predecessors, administrators, and any persons on whose behalf a Settlement Class Member is authorized to ; et. 3 Legal Notice If You Used The Services Of Gallagher Entities (listed below) Or Other Broker Defendants (listed below) To Purchase Or Renew Insurance Or Reinsurance From Any Insurer Between August 26, 1994 And December 31, 2005, You Could Be Entitled To Monetary Relief From A Class Action Settlement IF, DURING THE PERIOD AUGUST 26, 1994 THROUGH DECEMBER penses that Gallagher will, subject to Court approval, pay to Class Counsel. 31, 2005, INCLUSIVE, YOU Class Counsel will seek an award of attorneys' fees and expenses of no more ENGAGED THE SERVICES OF THE GALLAGHER ENTITIES than Eight Million Eight Hundred Eighty-Five Thousand ($8,885,000.00) ( "GALLAGHER ") OR ANY OTHER BROKER DEFENDANT Dollars. Gallagher has agreed that it will not object to paying fees and ex- (BOTH AS IDENTIFIED BELOW) IN CONNECTION WITH penses up to that amount. The award of attorneys' fees and expenses to Class THE PURCHASE OR RENEWAL OF INSURANCE OR REIN- Counsel is subject to Court approval. Class Counsel intends to apply to the SURANCE FROM ANY INSURER Court for an incentive award of Ten Thousand Dollars ($10,000) to each named YOU COULD BE ENTITLED TO PARTICIPATE INA CLASS ACTION Plaintiff tigation. Gallagh oer will pay attomeys' fees, expenses and the incentive awards SETTLEMENT UNDER WHICH YOU WOULD RECEIVE MONETARY in addition to the other amounts it is required to pay under the Gallagher RELIEF REACHED IN THE ACTION ENTITLED IN RE: INSURANCE Settlement Agreement. Thus, you will not be responsible for any of Class BROKERAGE ANTITRUST LITIGATION, MDL NO. 1663, CIVIL NOS. Counsel's fees or expenses or the incentive awards, and none of those fees, 04-5184 AND 05 -1079 (GEB) PENDING IN THE UNITED STATES DIS- expenses or awards will be deducted from the settlement relief. TRICT COURT, DISTRICT OF NEW JERSEY (THE "CLASS ACTION "). The following is only a summary of the class action .settlement in In Re Insurance Brokerage Antitrust Litigation. You are encouraged to obtai the detailed Notice. If you believe that you are eligible to participate in th action settlement described in this Court - Ordered Published Notic but did not receive in the mail a detailed Notice describing the ,settlement please visit lvww,gallaghersettlement.com, where you can obtain the detail Notice, or contact the Court - approved Settlement Administrator as set oar below to request a copy of the detailed Notice. A settlement in the class action (and a related Illinois state court class ac tion entitled Village of Orland Hills v. Arthur J. Gallagher & Co., Case No 00 CH 13855, lllinois Circuit Court, Cook County) has been reached with Gallagher (the "Gallagher Settlement" or "Gallagher Settlement Agreement "). The Class Action alleges violations of federal and state antitrust laws, the Racketeer influenced and Corrupt Organizations Act, and common law aris- ing out of: (i) certain insurers providing quotations to policyholders and pro- spective policyholders through certain brokers in connection with the place- ment and renewal of insurance contracts; and (ii) contracts, agreements, ar- rangements and understandings about the payment of commissions to bm- kers that are contingent upon, among other things, a broker placing a particu- lar number of policies or dollar value of premium with the insurer. If the Gallagher Settlement is finally approved by the Court, a settlement fund with $28 million (plus applicable interest) will be created by Gallagher and will be distributed to those who fit within the description of the Settle- ment Class that is summarized above ( "Settlement Class" or "Settlement Class Members "). A more complete description of the Settlement Class can be found in the detailed Notice. In addition to this settlement fund of $28 million, Gallagher will also pay a Court- approved award of attorneys' fees and expenses, incentive awards and all administrative costs incurred to implement the Gallagher Settlement — in- cluding the cost of establishing a toll -free telephone center to respond to Settle- ment Class Members' inquiries. None of these costs will be deducted from the settlement fund. If you are a Settlement Class Member and you do not wish to participate in the Gallagher Settlement, you must request exclusion from the Settle- ment Class by no later than June 29, 2007. If you think that you might be a Settlement Class Member, you can obtain more information — including a copy of the detailed Notice and Claire Fonn and other settlement related materials at www gallaghersettlement.com. Claim Forms must be received by the Settlement Administrator described below on or before November 16, 2007. WHAT ARE THE LEGAL EFFECTS OF PARTICIPATING IN THE GALLAGHER SETTLEMENT? n If the Court approves the Gallagher Settlement, Plaintiffs and Gallagher he will seek the entry of a Judgment and an Order Approving Settlement that, e among other things, will: , • find that the settlement is fair, reasonable and adequate; ed • finally certify the class for settlement purposes; t • dismiss the Class Action with prejudice as to the Gallagher Entities, mean- ing that no Settlement Class Member — including you (unless you timely exclude yourself) — will he able to bring another lawsuit or proceeding against any of the Releasees (as that term is defined in the Gallagher Settle- . ment Agreement) based upon the claims that have, will be, or that could have been raised in this Class Action; • incorporate the Release that is found in the Gallagher Settlement Agree- ment as part of the Order Approving Settlement; • permanently bar Settlement Class Members from filing or participating in any lawsuit or other legal action against any or all Releasees arising from or relating to any and all claims that have been, will be, or that could have been raised in this Class Action; • enter a bar order that will: - prevent any person or entity from commencing, prosecuting or asserting any claim (including any claim for indemnification or contribution) against any Releasee where the alleged injury to the barred person or entity is based upon that person's or entity's alleged liability to the Settle- ment Class or a Settlement Class Member. and - prevent any Releasee from commencing, prosecuting or asserting any claim (including any claim for indemnification or contribution) against any person or entity where the Releasee's alleged injury is based upon the Releasee's alleged liability to the Settlement Class or a Settlement Class Member; • award attorneys' fees and expenses to Class Counsel; • award incentive payments to the named Plaintiffs; and • retain jurisdiction over all matters relating to the administration, enforce- ment and interpretation of the settlement. As noted, if the Court approves the Gallagher Settlement, the Release that is found in the Gallagher Settlement Agreement will be incorporated into the Court's Order Approving Settlement. The Release describes the claims that Settlement Class Members will give up, as well as the identity of the Releasees — i.e., the people and entities that will be released. As discussed below, you can obtain a copy of the Release (including the definition of Releasees) from the Court- approved Settlement Administrator or from the wehsites of certain Class Counsel. WHAT DOES THE GALLAGHER SETTLEMENT PROVIDE? At least $28 million will be distributed in connection with the Gallagher Settlement. In addition to the monetary relief, and as more fully explained in the de- tailed Notice, Gallagher will implement certain business reforms concerning: • Permissible Forms of Compensation • Prohibition on Contingent Compensation • Prohibition of "Pay -to -Play" Arrangements • Prohibition of 'Bid- Rigging" Arrangements • Prohibition of Reinsurance "Leveraging" • Prohibition of Inappropriate Use of Wholesaler Insurance Brokers • Mandated Disclosures to Clients WHO IS PAYING THE ATTORNEYS' FEES AND OTHER EXPENSES THAT ARE BEING SOUGHT? After Class Plaintiffs and Gallagher agreed on all other terns of the Gallagher Settlement Agreement, counsel for the named Plaintiffs ( "Class Counsel ") and Gallagher negotiated the amount of attorneys' fees and ex- HOW WILL SETTLEMENT PAYMENTS BE MADE? If you area Settlement Class Member you will have to fill out a Claim Form and submit it to the Settlement Administrator, Complete Claim So- lutions, LLC at Gallagher Insurance Brokerage Antitrust Settlement, c/o Complete Claim Solutions, LLC, P.O. Box 24749, West Palm Beach, FL 33416. You can obtain the Claim Form by visiting the website of the Court- approved Settlement Administrator at www.gallaghersettlement•com, by calling 1 -866- 459 -3650, Monday through Friday from 9:00 a.m. to 5:00 p.m. EDT, by writing to Gallagher Insurance Brokerage Antitrust Settlement, c/o Complete Claim Solutions, LLC, P.O. Box 24749, West Palm Beach, FL 33416, or by sending an e -mail to gall agheradmin @completeclaimsolutions.com. WHAT OPTIONS ARE AVAILABLE TO SETTLEMENT CLASS MEMBERS? If you fall within the definition of a Settlement Class Member, you may either (1) participate in the Gallagher Settlement (and receive settle- Legal Notice ment relief if the Court approves the Gallagher Settlement Agreement) or (ii) request exclusion from the Gallagher Settlement. If you want to participate in the Gallagher Settlement, but you object to any term of the Gallagher Settlement Agreement, you may submit an objec- tion to the Court. All objections must be filed with the Court and served on Class Counsel and Gallagher's Counsel by no later than June 29, 2007. The detailed Notice explains how to object. On or before June 19, 2007, named Plaintiffs and/or Gallagher shall file a memorandum in support of the Settlement. On the same date, named Plain- tiffs shall file their application for an award of attorneys' fees and expenses and incentive awards. Responses to the objections, if any, shall be filed by named Plaintiffs and/or Gallagher no later than July 10, 2007 and replies by any objectors shall be filed no later than July 16, 2007. If you want to exclude yourself from the Gallagher Settlement, you must submit a written request to the Clerk of the Court. Your request must be postmarked by no later than June 29, 2007. The detailed Notice explains about how to exclude yourself. WILL THE COURT HOLD A HEARING REGARDING THE GALLAGHER SETTLEMENT? The Court will hold a hearing on July 24, 2007 at 1:00 p.m. EDT in Court- room 4E in the United States Courthouse located at U.S. Courthouse Build- ing, 402 East State Street, Trenton, New Jersey 08608, to consider whether to approve the Gallagher Settlement, including, among other things, the Plan of Allocation, and whether to grant Class Counsel's request for attorneys' fees, expenses and incentive awards for the named Plaintiffs. If you file an objec- tion, you may appear at this hearing and ask to be heard by the Court, but you do not need to do so. If you (or an attorney hired at your expense) intends to appear at the hearing, you (or your attorney) must file a notice of intention to appear. The detailed Notice explains how to file and serve a notice of inten- tion to appear. The Court may choose to change the date and/or time of the hearing with- out further notice of any kind. HOW CAN A SETTLEMENT CLASS MEMBER GET ADDITIONAL INFORMATION? The Gallagher Settlement Agreement sets out the details of the Gallagher Settlement, including the terms of the Release by which Settlement Class Members will be bound if the Gallagher Settlement is approved. A complete description of the Plan of Allocation and the Release is also attached to the detailed Notice. Both the Gallagher Settlement Agreement and the detailed Notice (which includes the Release and the Claim Form) are available at the Court- approved Settlement Administrator's website, www,gallaehersettlement.eom, by calling 1 -866 -459 -3650, Monday through Friday from 9:00 a.m. to 5:00 p.m. EDT, by writing to Gallagher Insurance Brokerage Antitrust Settlement, c/o Complete Claim Solutions, LLC, P.O. Box 24749, West Palm Beach, FL 33416, or by sending an e-mail to gall agheradmin @completeclaimsolutions.com. The Notice is also available at the following Class Counsel websites: Cafferty Faucher LLP — www,cdffert_vfattcher,com• Whatley, Drake & Kailas, LLC — www; whatleydrake.com' Foote, Meyers, Mielke & Flowers LLC — rvn . meyers.com; Furth, Lehmann & Grant LLP — wsvwtfirrth,com; Levin, Fishbein, Sedran & Berman - wwwlfrhlaw.com; Lerach Coughlin Stoia Geller Rudman &. Robbins, LLP — www,lerachlaw com; Zwerling, Schachter & Zwerling, LLP — wwwzsz.com; and at Gallagher Defendants' website, www. ajg.com. Additional information regarding this Class Action may be obtained by visiting wwwinsuranc .•ebmketageclancounsel.com. Additional information regarding the Gallagher Settlement may also be obtained by contacting the following Class Counsel: Edith M. Kailas, Esq. Bryan L. Clobes, Esq. Whatley, Drake & Kailas, LLC or Cafferty Faucher LLP 1540 Broadway, 37'" Floor 1717 Arch Street, 36th Floor New York, NY 10036 Philadelphia, PA 19103 E -mail: ekallas @whatlevdrakecorn} E -mail: bclobes @caffertyfauchercorn PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE FOR INFORMATION The Gallagher Settlement involves the following "Gallagher Entities ": AJG Canada ULC AJG Capital, Inc. AJG Chem Mod Holdings LLC AJG Coal, Inc. AJG Coal Indiana LLC AJG Financial Services, Inc. AJG Investments, Inc. AJG North America ULC AJG Two Pierce, Inc. (Delaware) Artex Insurance Company Ltd Artex Risk Solutions, Inc. Artex Underwriting Managers Ltd. Arthur J. Gallagher Arthur 1. Gallagher & Co. Arthur'. Gallagher & Co. (Bermuda) Limited Arthur J. Gallagher & Co. (Canada) Ltd. Arthur J. Gallagher & Co. (Florida) Arthur J. Gallagher & Co. (Illinois) Arthur J. Gallagher & Co. - Greenville Arthur J. Gallagher & Co. - Little Rock Arthur J. Gallagher & Co. Insurance Brokers of California, Inc. Arthur J. Gallagher & Co. of Kentucky, Inc. Arthur J. Gallagher & Co. of Mississippi, Inc. Arthur J. Gallagher & Co. of New York, Inc. Arthur J. Gallagher & Co. of Tennessee, Inc. Arthur J. Gallagher Brokerage and Risk Management Services, LLC Arthur J. Gallagher Intermediaries (Bermuda) Limited Arthur J. Gallagher Management (Bermuda) Limited Arthur J. Gallagher Risk Management Services, Inc. Arthur J. Gallagher Service Co. (Delaware) Arthur J. Gallagher (UK) Limited Arthur J. Gallagher Middle East BSC(c) Arthur J. Gallagher Asia Pte Ltd. Arthur J. Gallagher Asia Limited Arthur J. Gallagher (L) BHD Arthur J. Gallagher Australasia Holdings Pty. Ltd. Arthur J. Gallagher Reinsurance Australasia Pty Ltd. Arthur J. Gallagher (Aus) Pty Ltd. Australis Group (Underwriting) Pty Ltd. Aviacargo Leasing Limited Charity First Insurance Services, Inc. C.W. Excess, Inc. Commonwealth Premium Finance Corporation Connor Hale Kerslake Limited Edwin M. Rollins Company Gallagher Bassett Services, Inc. (Delaware) Gallagher Bassett of New York, Inc. Gallagher Bassett International Ltd. (UK) Gallagher Bassett Canada Inc. Gallagher Basset Services Pty Ltd Gallagher Bassett International S.A. Gallagher Benefit Services, Inc. Gallagher Captive Services (Cayman) Limited Gallagher Healthcare Insurance Services, Inc. Gallagher healthcare Insurance Services of Kansas City, LLC Gallagher Holdings Bermuda Company Limited Gallagher Holdings (UK) Limited Gallagher Lambert Group Gallagher Loss Control Services, Inc. Gallagher Re, Inc. Gallagher Re Limited GBS Administrators, Inc. GBS Insurance and Financial Services, Inc. GBS Retirement Services, Inc. Interpacific Underwriting Agencies Pty Ltd. Lamberson Koster & Co. Manning & Smith Insurance, Inc. MRS Holdings Limited Morgan Read & Sharman Limited Protected Insurance Company Risk Management Partners Ltd. Risk Placement Services, Inc. (Illinois) Risk Placement Services of Arizona, Inc. Risk Placement Services of Arkansas, Inc. Risk Placement Services of Louisiana. Inc. Risk Placement Services of Massachusetts, Inc. Risk Placement Services of Nevada, Inc. Risk Placement Services of New York, Inc. Risk Placement Services of Pennsylvania. Inc. Risk Placement Services of Texas, Inc. Scholastic Risk Services Limited Sobieski & Bradley of Nevada, Inc. Strand Underwriting Limited Western Litigation, Inc. Wyatt Gallagher Bassett Workers Compensation Victoria Pty Ltd. The other Broker Defendants in the Action (the "Broker Defendants ") are: Acordia, Inc. Affinity Insurance Services, Inc. Aon Broker Services, Inc. Aon Consulting Inc. Aon Corporation Aon Group Inc. Aon Re, Inc. Aon Re Worldwide, Inc. Aon Risk Services Companies, Inc. Aon Risk Services, Inc. of Louisiana Aon Risk Services. Inc. of Maryland Aon Risk Services, Inc. of Michigan Aon Risk Services Inc. U.S. Aon Risk Services of Texas, Inc. Aon Services Group. Inc. Benefits Commerce BB &T Corporation BB &T Insurance Services, Inc. Branch Banking and Trust Company Brown & Brown, Inc. Brown & Brown Insurance Benefits, Inc. Frank H. Haack & Associates Hilb, Rogal & Hobbs Company Hub International Limited Marsh & McLennan Companies, Inc. Marsh Inc. Marsh USA, Inc. Marsh USA Inc. (Connecticut) Mercer, Inc. Mercer Human Resource Consulting LLC Mercer Human Resource Consulting of Texas, Inc. O'Neill Finnegan & Jordan Insurance Agency, Inc. Seabury & Smith, Inc Stewart Smith Group Summit Global Partners of Florida, Inc. Talbot Financial Corporation Universal Life Resources ULR Insurance Services, Inc. USI Holdings Corporation USI Consulting Group USI Insurance Service Corporation USI Insurance Services of Florida, Inc. (d/b /a USI Florida) Wells Fargo & Company Willis Group Holdings Limited Willis Group Limited Willis North America, Inc. Willis of New York, Inc. Willis Re Inc. 7.B. AUTOMOBILE TAKE HOME POLICY 4078844343 ROPER AND ROPER ROPER & ROPER, P.A. ATTORNEYS AT LAW 116 N. Park Avenue Apopka, Florida 32703 Donovan A. Roper, Esquire Teresa S. Roper, Esquire Andrew I. Dayes, Esquire Heather A. Macre, Esquire Sophia E. Langley, Esquire* * Of Counsel Cynthia A. Todd, Paralegal Paula Sontos, Paralegal August 16, 2007 Mr. Ross Furry PRM 3434 Hancock Bridge Parkway, Suite 203 N. Ft. Myers, FL 33903 Dear Mr. Furry: 11:12:21 a.m. 08 -17 -2007 2/4 Telephone: (407) 884 -9944 Facsimile: (407) 884 -4343 E -Mail: email @roperandropercom Web: www.roper<tndroper.com Satellite Offices in Palatka, Florida Pursuant to your recent request, the following is my legal opinion with regard to coverage by Public Risk Management of Florida ( "PRM ") under the PRM Coverage Document for the coverage period beginning October 1, 2006 and expiring April 1, 2008 for automobile liability, garagekeepers legal liability, and automobile no -fault claims by PRM Members, or their employees, involving "take home" vehicles owned by the PRM Member at a time and place where, or when, that PRM Member's employee operating the vehicle is off- -duty, or otherwise not acting within the course and scope of their governmental employment with the affected PRM Member. For the following reasons, it is my legal opinion that the PRM Coverage Document in question, as referenced above, does indeed provide automobile coverage in such situations, and for the various types of coverage referenced above. Please note that, with regard to automobile medical payments, and uninsured/underinsured motorist coverages, the same is specifically excluded, or "not covered" under Part I A, p. 8, of the PRM Coverage Document for any and all accidents involving PRM- Member owned, leased/hired, or other vehicles. Under Section III of the Coverage Document titled "Automobile Liability," there is broad automobile liability coverage afforded not only to the PRM governmental Member itself but also its employees for all owned or hired vehicles -- Paragraph III (A) states: The ASSOCIATION agrees, subject to the Coverage Document limitations, terms and conditions, to pay on behalf of the MEMBER for all sums which the MEMBER is obligated to 4078844343 ROPER AND ROPER Mr. Ross Furry August 16, 2007 Page 2 11:12:43 a.m_ 08 -17 -2007 pay by reason of the liability imposed upon the MEMBER by law or assumed by the MEMBER under contract or agreement, including non -owned and hired automobiles, for damages direct or consequential, and expenses, all as more fully defined by the term ULTIMATE NET LOSS, arising out of any OCCURRENCE on account of BODILY INJURY including death at any time resulting therefrom, suffered or alleged to have been suffered by any person(s) or organization(s) and/or PROPERTY DAMAGE, arising out of the ownership, maintenance or use of any AUTOMOBILE, occurring during the COVERAGE PERIOD. (emphasis added) It is understood and agreed that Non -owned automobile liability coverage shall include those automobiles owned by any Official, Employee or Volunteer by the MEMBER, ONLY while the automobile(s) is used in the business or at the direction of the MEMBER. It is a condition of this Insuring Agreement that coverage provided within this Document shall be excess over any other valid and collectible insurance which may be in existence, as allowed by law. (emphasis added) With regard to the definition ofMEMBER as referenced in Section III (A) above, and also as to the following sections involving no-fault and garage keepers legal liability coverage (ie, Section III(b) through (e)), paragraph 2 of the subsequent Section III Definitions section, on a highly important and dispositive note, clarifies same as follows: MEMBER means not only the MEMBER as defined in the GENERAL COVERAGE DOCUMENT DEFINITIONS, but under this SECTION III also includes any person while using an owned or hired AUTOMOBILE with the permission of the MEMBER. (emphasis added). Due to the existence of this section, it appears clear that, as long as the off -duty employee has/had the permission of the PRM Member to be operating or using their owned, or hired, automobile, or that off -duty employee alternatively is operating a nongovernmental) -owned automobile at the direction of the PRM Member or pursuant to 3 /4 4078844343 ROPER AND ROPER Mr. Ross Furry August 16, 2007 Page 3 11:13:01 a.m. 08 -17 -2007 its business, then the PRM Coverage Document should afford coverage to that employee with regard to automobile liability, garage keeper's legal liability, and PIP (or "no- fault ") claims. It should likewise be noted that there is no explicit coverage exclusion for "take home" vehicles, or for off -duty employees operating same outside the course and scope of their governmental employment. Clearly, such coverage would only apply to "AUTOMOBILES" as defined in the general coverage document definitions, paragraph 2 (p. 17). Moreover, for automobile liability insurance purposes, the liability of PRM would still be limited to the "ULTIMATE NET LOSS" as defined in the general coverage document definitions, paragraph 22 (p. 20). In light of the above, I would strongly urge each PRM Member to investigate whether or not their entity currently has policies or procedures in place regarding "take- home" vehicles, and if not, that they take steps to immediately promulgate effective policies and procedures governing the use of "take- home" vehicles so as to limit or mitigate their exposures. I would be happy to assist in that regard if requested to do so. Thank you for your kind attention and professional consideration. I remain DAR:ddc ly yo DONOVAN A. OPER 4 /4 PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING SEPTEMBER 14, 2007 8. Board Member Items REGULAR AGENDA SUMMARY John Litton, Chairperson A. Lee County Port Authority — Request to Withdraw 3/31/08 At the May Board Meeting, By -Laws were amended requiring members to provide written notice to withdraw at least one year prior to the end of the policy year. Policy year begins 4/1/08 so notice must be received by 3/31/08. Prior to the change from fiscal year to policy year, members had until 9/30/07 to notify PRM of their intent to withdraw. LCPA is requesting Board approval for any interested members submitting their notice to withdraw by 9/30/07 to become effective on March 31, 2008, as long as the member completely exercises the remaining termination requirements. See attached letter. Attachment: Page 4 of May 17, 2007 Meeting Minutes with Board action. Board Action: _Approved Denied Deferred Other B. Location of Future Annual Conference The next Board Meeting will be held on December 14, 2007, at the Terrace Hotel in Lakeland. Public Comment: Discussion must be limited to a maximum of five (5) minutes per person. Adjourn LL_ LEE COUNTY PORT AUTHORITY ROBERT M. BALL, A.A.E. EXECUTIVE DIRECTOR DAVID M. OWEN PORT AUTHORITY ATTORNEY BOARD OF PORT COMMISSIONERS A. BRIAN BIGELOW TAMMY HALL BOB JANES RAY JUDAH FRANK MANN July 30, 2007 Mr. Ross Furry Executive Director Public Risk Management 2424 Hancock Bridge Parkway, Ste.203 Fort Myers, FL 33903 Dear Mr. Furry: Direct Dial: Fax: (239) 590 -4500 (239) 590 -4595 It was a pleasure seeing you at our past Joint Board meeting on June 27, 2007. Thank you again for your time and for a very nice presentation. As you know, the Lee County Port Authority (Authority) is currently evaluating its insurance program. Clearly PRM has been a very good program for the Authority since joining in 1989. As you are aware however, conditions at the Authority have changed significantly since 1989. Not only has airport grown at significant rate, we have also moved into a brand new, state -of -the -art facility. Due to our continued growth and the obvious changes in the insurance market, it is time for the Authority to re- evaluate its insurance program, including but not limited to: self-insurance; obtaining our own independent insurance policies and /or a combination thereof. Although our preference would be to continue our participation in the PRM program, we can only do so if it makes financial sense. Prior to the by -law changes, we had until September 30, 2007, to decide if we intended to give PRM notice of termination that could ultimately be effective October 1, 2008. As a result of the recent by -law changes will the PRM Board accept notice from a member regarding their intent to terminate on or before September 30, 2007, and as such, terminating their membership effective March 31, 2008? I have been unable to determine if during the first year of the recently adopted by -law changes, if this was addressed. We request the PRM Board permit members (that is, any interested) to submit notice of intent to terminate by September 30, 2007, becoming effective on March 31, 2008 — should the member completely exercise the remaining termination requirements. SOUTHWEST FLORIDA INTERNATIONAL AIRPORT 11000 Terminal Access Road, Suite 8671 Fort Myers, Florida 33913 -8899 www.flylcpa.com Mr. Ross Furry Executive Director Public Risk Management July 30, 2007 Page 2 I hope that you do not take this request as non - support of the recent by -law changes. I applaud PRM for making these changes and agree that this change should benefit members in the long term. We appreciate your consideration and willingness to work with us in determining an equitable resolution to this issue. Sincerely, LEE COUNTY PORT AUTHORITY Benjamin R. Siegel Division Director - Administration cc: Robert M. Ball, Executive Director Gene P. Meyers, Administration Pamela Conner, General Services Robert Zega, Risk/Training Development John Litton, PRM Board Chairman Article 9 — Finances and Risk Management Pool Amendment to Article 9.2.Budget — Change fiscal year to policy year. Change date to adopt a final budget from August 1 to February 1 to coincide with policy year. Amendment to Article 9.4. Budget Amendments — Change fiscal year to policy year. Article 10 — Excess Insurance Amendment to Article 10.4. Losses — Change fiscal year to policy year. Article 11 — Obligations of Members Amendment to Article 11.1.7.1. — Change date to November 1 and change fiscal year to policy year. Article 14 — Settlements Amendment to Article 14.1 Settlement/Advance Notice — Change settlement amount from $5,000 to $10,000. Mr. Boyle made a motion to approve the By -Laws changes. The motion was seconded by Wayne O'Neal and it was approved by majority vote with one opposed (Lee County Port Authority). In moving the date for giving notice to withdraw from the Pool from October 1 to April 1, a determination was needed by the Board on how to proceed with those members submitting their intent to withdraw as of 10/1/08. Today's approved changes to the By -Laws require members to remain in the Pool until 411/09. A motion was made by Mr. Drury that any member who gives notice to withdraw from the Pool, their notice will be effective for the April 1, 2009 policy periods. Mr. Boyle seconded the motion and it was approved by majority vote with two opposed (Lee County Port Authority and City of Clewiston). 6. Broker's Report A. Property Proposal for 10/1/07 thru 4/1/08 — Greg Butterfield was accompanied by Suzanne Brandt, CRC, and Mike Berend, RPS, to discuss a proposed extension of the property program to 4/1/08. The broker had incorrectly informed the Board at the March meeting that the Citizens Assessment Fee would not be charged. However, the proposal is an extension to the 2006 program, and the 6.84% Citizens fee would be assessed. With a 20% discount currently provided by the carriers, the total extension premium is $5,570,914 for $1.825 billion of 4 PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING SEPTEMBER 14, 2007 REGULAR AGENDA SUMMARY 5. Broker's Report A. Property Renewal 10/1/07- 4/1/08 The Broker will review the 6 -month property renewal at the meeting. B. April 2008 Renewal Submission Renewal submission for April, 2008 will be discussed. C. Florida Personal Injury (PIP) Andy Cooper, World Risk Management oc,e Effective 10/1/07, Florida PIP will no longer apply to policies with Florida exposures, whether the policy is Florida only, or a multi -state policy with a Florida exposure. The amendment to the Florida PIP law which provided for the repeal, or "sunset" of Florida effective October 1, 2007, was enacted during the 2003 Florida legislative session. Whether or not the repeal of Florida No -Fault would remain in effect has been a much debated issue in the Florida Legislature for some time now. The final outcome of this discussion is that the repeal will remain in effect, and effective October 1, 2007, Florida No -Fault will no longer exist. Florida PIP Coverage provided certain benefits including death benefits, medical expenses, replacement services expenses, and work loss resulting from bodily injury to the named insured or any other person occupying a covered auto, regardless of who was at fault in an accident. The repeal of the Florida PIP law means that tort law will govern legal liability for auto accidents, i.e., who is at fault in an accident will determine how auto liability coverage applies. Alternatives to No -Fault — Medical Payments Coverage is an option which is available to Florida insureds at per accident limits of $500 to $10,000. Medical Payments Coverage pays up to the limit the insured selects for reasonable and necessary medical expenses for medical and funeral services incurred by occupants of your owned autos as a result of an auto accident. Medical Payments Coverage applies regardless of fault. However, it does not provide work loss benefits, or any of the other specific benefits or per person limits that were available with Florida PIP. Summary of Insurance cost and increases 2006 -2007 Fiscal Year Coverage Assignments for premiums Total Last year Premiums, Administratvice Charges, Property, Liablity, Errors & Ommissions, Equipment 50% of Loss Fund contribution PRM Admin. & Loss Prevention Gallagher Basett Fee Citzens Assessment Total cost for P &C Less Contribution from Surplus P &C totals for assignment Worker Compensation Excess Worker Comp 50% of Loss Fund contribution Full 5% Drug Free Credit Safety Credit WC State Fees WC totals for assignment Fees, Loss Fund Contributions $ 87,991.00 $ 78,087.50 $ 8,653.00 $ 12,552.00 sz $ 3,297.00 $ 190, 580.50 $ (14,600.00) $ 175,980.50 $ 9,764.00 $ 78,087.50 $ (7,809.00) $ (4,685.00) $ 5,352.00 $ 80,709.50 Total Insurance Cost $ 256,690.00 Summary of Insurance cost and increases 2006 -2007 Fiscal Year Total Last year Premiums, Administrative Charges, Fees, Loss Fund Contributions 05 -06 Prem. 2007 Prem Package Policy 24,719 29,096 Excess Property $7,073,223. 13,439 48,439 Excess Liablity, 3,000,000 10,145 10,456 48,303 87,991 Excess Worker Comp Total Excess Premiums Loss Fund contribution 5% Drug Free Credit 3% Safety Credit 9,903 9,764 58,206 97,755 159,116 156,175 - 7,956 -7,809 - 4,773 -4,685 146,387 143,681 Administration Costs PRm Admin. & Loss Prevention 7,832 8,653 Local consutant Fee 10000 0 Gallagher Bassett Fee 16478 12552 Worker comp State Fees 10,080 5,352 44,390 26,557 Citizens Assessment 0 3,297 Total PRM 248,983 271,290 Less Contribution from surplus 0 14600 Annual cost 256,690 CITY OF OKEECHOBEE PUBLIC RISK MANAGEMENT OF FLORIDA MEMBER CONTRIBUTION BREAKDOWN Excess Insurance Premiums: Package Policy Excess Property - $7,073,223 Excess Workers Comp - $2,240,407 Excess Liability - $3,000,000 xs $2,000,000 Total Excess Insurance Premiums: Loss Fund Contribution @ 100 %: Less: 5% Drug Free Credit Less: 3% Safety Credit Loss Fund After Credits: Administration Costs: PRM Administration and Loss Prevention Local Consultant's Fee Gallagher Bassett Fee Workers' Compensation State Fees ** Total Administration Costs: TOTAL PRM COSTS: 5% Approved Drug -Free and 3% Approved Safety Credit Available - See PRM ** State Fees are subject to change by State of Florida 39 — Column I % Column 1I 2005/2006 Inc /Decr 2004/2005 $24,719 $22,269 $13,439 $12,328 $9,903 $9,322 $10,145 $10,163 $58,206 ' 7.6% $54,082 $159,116 $141,061 ($7,956) ($7,053) ($4,773) ($4,232) $146,387 , 12.8% $129,776 - $7,832 $7,126 $10,000 $10,000 — $16,478 $13,654 _ $10,080 $7,761 $44,390 15.2% $38,541 $248,983 112.0% $222,399 CITY OF OKEECHOBEE PUBLIC RISK MANAGEMENT OF FLORIDA MEMBER ALLOCATION All Lines Package 24,719 Loss Fund 159,116 3% Safety Credit 4,773 5% Drug Free Credit 7,956 Loss Fund after credits 146,387 % Gallagher Bassett Services 16,478 — PRM Administration 7,832 Local Agent Fee (if applicable) -.10,000 -- Total All Lines: 205,416 Property Total All Lines 205,416 x .100 = 20,542 Excess Property 13,439 Excess Crime (if applicable) 0 Total Excess Property 33,981 General Liability Total All Lines 205,416 x .175 = 35,948 Automobile Liability Total All Lines 205,416 x .150 = 30,812 Errors & Omissions Total All Lines 205,416 x .075 = 15,406 Workers Compensation Total All Lines 205,416 x .500 = 102,7081 Excess Workers' Compensation 9,903 / State work comp fees " 10,080 Total Workers' Compensation •i: 122,691 -.0=' Boiler & Machinery (if applicable) 0 Excess Liability (if applicable) /x0,145\ Total ; 248,983 40 Brian Whitehall City of Okeechobee Office of the City Administrator September 7, 2007 Ross Fury Executive Director Public Risk Management 3434 Hancock Bridge Pkwy, Ste 203 Ft. Myers, FL 33903 Dear Mr. Fury: Please be advised that on September 5, 2007, the Okeechobee City Council approved Sharon Allison as a regular member to the PRM Board of Directors and appointed Brian Whitehall as an alternate member to the Board. If you have any questions, please do not hesitate to call. Sin -ly, Ban h. shall City Ad inistrato 55 S.E. Third Avenue • Okeechobee, Florida 34974 -2932 • (863) 763 -3372 • Fax: (863) 763 -1686 l ORtd*,t, City of Okeechobee December 2, 1999 Judy Bright Public Risk Management 2013 Altamonte Avenue Unit 25 Fort Myers, FL 33901 Dear Ms. Bright: The Okeechobee City Council approved Donna V. Reynolds as a regular member to the PRM Board of Directors and reappointed Mayor Kirk as an alternate member to the Board. A copy of the minutes is attached for your records. If you have any further questions, please let me know. Sincerely, Bonnie S. Thomas Interim City Administrator BST %jas Enclosures 55 8.l's. Third Avenue • Okeechobee, Florida 34974 -2932 + (941) 763.3372 • Fa= (941) 763.1686 Florida League of 0502 Memorandum AC o . Page 2 of 7 Thu Aug 30 2007 17:21:48 EDT 1/11/ J("‘ U FLORIDA LEAGUE OF CITIES, INC. TO: MUNICIPAL ATTORNEYS FROM CHIP MORRISON, GENERAL COUNSEL KRAIG CONN, DEPUTY GENERAL COUNSEL RE: CLASS ACTION CHALLENGING MUNICIPAL /COUNTY OCCUPATIONAL LICENSE TAX ORDINANCES IMPOSED ON ATTORNEYS DATE: 8/30/2007 Attached for your review and information is a letter from David Smith, City Attorney for the City of Tampa. The letter relates to a lawsuit establishing a plaintiff class of attomeys paying occupational license taxes and a defendant class of all cities and counties imposing an occupational license tax on attorneys. Your city may be one of the over 200 cities that impose such a tax. We have not included a copy of the Trial Court's Order establishing the plaintiff and defendant classes, or the Second District Court of Appeal's Opinion affirming the Order. The 2 "d DCA Opinion is cited as Case No. 2D06 -3168 and can be found at 2007WL2254577. Also, we can e-mail you. the 2" d DCA Opinion if you contact our office at (850) 222 -9684 or e-mail Tkevell@flcities.com The Florida League of Cities, along with the Florida Association of Counties and several individual cities and counties, participated as amici curiae at the 2nd DCA. As the City of Tampa's letter indicates, your city may receive a formal notice of class membership after further disposition of the appeal, at which time you may seek to remove your city from the class or otherwise become involved in the case. The League will continue to keep you apprised of further developments in this matter. 301 South Bronough Street • Post Office Box 1757 • Tallahassee, FL 32302 -1757 Telephone (850) 222 -9684 • Suncom 278 -5331 • Fax (850) 222 -3806 • Website:www,flcities.com Florida League of 8502223806 Page 3 of 7 Thu Aug 30 200? 17:22:36 EDT CITY OF TAMPA Pam brio, Mayor Office of the City Attorney August 27, 2007 VIA E-MAIL WITH ATTACHMENTS. ALL CITY ATTORNEYS ALL COUNTY ATTORNEYS David L. Smith City Attorney Re: Notice to Cities and Counties in the State of Florida of the Court's Ruling on Plaintiffs' Class Motion to Certify Classes Dear City and County Attorneys: In June, 2003 the City of Tampa was sued individually, and as a representative of other Florida municipalities and counties, in connection with a constitutional challenge to the occupational license tax paid by attorneys in the State of Florida. The lawsuit seeks, inter alto, (1) a judgment declaring unconstitutional the occupational license tax ordinances imposed on attorneys, and (2) the entry of judgment requiring a refund of all occupational license taxes paid by attorneys during the four years preceding the filing of the lawsuit and subsequently paid fees. On June 21, 2006, the trial court entered an Order granting the Plaintiffs' Motion to Certify both the Plaintiff Class and Defendant Class. (A copy of the Court's Order is attached hereto.) The Plaintiff Class consists of more than 50,000 members of the Florida Bar Iocated throughout the State of Florida, and the Defendant Class consists of at least 200 cities and at least 35 counties within the State of Florida who have enacted occupational licensee tax ordinances, On August 8, 2007 the Second District Court of Appeal issued an opinion affirming the June 21, 2006 Order of the trial court. (A copy of the District Court of Appeal's Opinion is attached hereto.) On August 22, 2007 the City of Tampa filed a Motion for Rehearing, Rehearing En Banc, Clarification and/or Certification. The City of Tampa may also seek review from the Florida Supreme Court. The City of Tampa wanted to make you aware of these developments so that you could determine whether you wish to seek to decertify the class or otherwise to intervene in the action at the trial level after the disposition of the appeal. Your assistance would be greatly appreciated and could be very helpful in obtaining a favorable outcome. A formal notice to class members, in accordance with Fla. R. Civ. P. 1.220, will be issued after the disposition of the appeal. 315 East Kennedy Blvd., 5th Floor • Tampa, Florida 33602 • (813) 274-8996 • FAX: (813) 274.8509 www.tampagov.net Florida League of 8502223806 Page 4 of 7 August.27, 2007 All City Attorneys All Camay Attorneys Page 2of2 Thu Aug 30 2007 17:23:30 EDT For your information, we are attaching hereto a listing of those cities and counties that have been identified in Plaintiff§' First Amended Complaint as allegedly being members of the Defendant Class. The Plaintiffs may also take the position that additional cities and counties are also members of the Defendant Class. Please feel free to call Chief Assistant City Attorney, Jerry Gewirtz, at 274 -8842 (who is handling the litigation in this matter), if you have any questions or comments. Thank you for your consideration in this matter. City Attorney Jerry M. Ciewirtz Chief Assistant City Attorney JMO:kts Enclosure ybdkooaieanmpondeacektotica to cities and amain in state of fiarida.doe Florida League of 8502223806 Altamonte Springs Florida League of 8502223606 Altamonte Springs Anna Maria Apopka Atlantic Beach Atlantis Auburndale Aventura Bal Harbour Bartow Belle Glade Belleair Beach Belleair Belleaire Bluffs Belleview Boca Raton Boynton Beach Bradenton Beach Bradenton Bunnell Cape Canaveral Casselbeny Chief land Chipley Cinco Bayou Clearwater Clermont Clewiston Cocoa Beach Cocoa Coconut Creek Coral Gables Crescent City Crestview Crystal River Dade City Dania Beach Davie Daytona Beach Daytona Beach Shores Deerfield Beach Destin Page 5 of 7 Exhibit A Dunedin Page 5 of 7 Exhibit A Dunedin Dunnelion Eagle Lake Eustis Fellsrnere Fernandina Beach Flagler Beach Florida City Fort Lauderdale Fort Myers Fort Pierce Fort Walton Beach Gainesville Green Cove Springs Greenacres Groveland Gulf Breeze Gulfport Hallandale Beach Haverhill Hialeah Hialeah Gardens Highland Beach Hilliard Holly Hill Hollywood Holmes Beach Homestead Howey -in- The -Hills Hypoluxo Indian Rocks Beach Inglis Jacksonville Beach Jacksonville Jupiter Kenneth City Key Biscayne Key Colony Beach Key West Keystone Heights Kissimmee Thu Aug 30 2607 17:24:67 EDT Lake Alfred r Thu Aug 30 2667 17:24:67 EDT Lake Alfred Lake City Lake Clarke Shores Lake Mary Lake Park Lake Wales Lake Worth Lakeland Lantana Largo Lauderhill Leesburg Lighthouse Point Longboat Key Lynn Haven Macclenny Madeira Beach Malabar Marianna Mary Esther Mascotte Medley Melbourne Melbourne Beach Miami Beach Miami Miami Shores Village Miami Springs Minneola Miramar Mount Dora Naples Neptune Beach New Port Richey New Smyrna Beach Niceville North Lauderdale North Miami North Palm Beach North Port North Redington Beach Florida League of 8562223806 Page 6 of 7 Thu Aug 30 2607 17:24:45 EDT Oakland Park Seminole Ocala Shalimar Ocean Ridge South Daytona Ocoee Springfield Okeechobee St. Augustine Beach Oldsmar St. Augustine Orange City St. Cloud Orange Park St. Pete Beach Orlando St. Petersburg Ormond Beach Starke Oviedo Stuart Palatka Sunrise Palm Bay Surfside Palm Beach Tallahassee Palm Beach Gardens Tamarac Palm Beach Shores Tampa Palm Shores Tarpon Springs Palm Springs Tavares Palmetto Tequesta Panama City Titusville Parker Treasure Island Parkland Valparaiso Pembroke Park Venice Pembroke Pines Vero Beach Pensacola Virginia Gardens Plant City Wauchula Plantation Wellington Polk City West Melbourne Pompano Beach West Palm Beach Port Orange Weston Port Richey Wildwood Port St. Lucie Wilton Manors Quincy Windermere Redington Beach Winter Garden Riviera Beach Winter Haven Rockledge Winter Park Royal Palm Beach Winter Springs Safety Harbor San Antonio Sanibel Satellite Beach Sea Ranch Lakes Sebastian Sebring \C:\F1LESIATTY TAX\ TAMPA \PLEADINGStERAillit A.ComptainL002 Page 2 of 2 Pages pd Florida League of 0562223806 Page 7 of 7 Exhibit B Alachua Brevard Broward Charlotte Citrus Dade (Miami -Dade) Duval Escambia Flagler Gilchrist Hendry Hernando Hillsborough Indian River Lake Lee Leon Marion Martin Monroe Nassau Okaloosa Okeechobee Orange Osceola Palm Beach Pasco St. Lucie Santa Rosa Sarasota Seminole Sumter Taylor Volusia Wakulla C:\FfLES\ATTY TAX\TAMPAtPLEADINGS\Exkibit B.Comptsint.001.wpd Thu Aug 30 2007 17:25:19 EDT lorida League of 8582223886 Page 1 of 7 Thu Aug 39 2897 17 :21:04 EDT FLORIDA LEAGUE OF CITIES, INC. 301 South Bronough Street • Suite 300 ♦ P.0 Box 1757 • Tallahassee, FL 32302 -1757 Phone (850) 222-9684 • Suncom 278 -5331 • FAX (850) 222-3806 • Website www.flcltfes.com Notes: To: Name: Teresa Roper Company: Fax Number: (407) 260 -3419 Voice Phone: From: Name: Meredith Brock Fax Number: 8502223806 Voice Phone: 8502229684 Date and time of transmission: Thu Aug 30 2007 17:20:42 EDT Number of pages including this cover sheet: 7 Please call (850) 222 -9684 if you have any questions or experience any problems in receiving this fax. 7.B. AUTOMOBILE TAKE HOME POLICY 40`78&4434;1 ROPER AND ROPER Donovan A. Roper, Esquire Teresa S. Roper, Esquire Andrew I. Dayes, Esquire Heather A. Macre, Esquire Sophia E. Langley, Esquire' * Of Counsel Cynthia A. Todd, Paralegal Paula Sontos, Paralegal ROPER & ROPER, P.A. ATTORNEYS AT LAW 116 N. Park Avenue Apopka, Florida 32703 August 16, 2007 Mr. Ross Furry PRM 3434 Hancock Bridge Parkway, Suite 203 N. Ft. Myers, FL 33903 Dear Mr. Furry: 11:12:21 a.m. 08 -17 -2007 2 /4 Telephone: (407) 884 -9944 Facsimile: (407) 884-4M3 E -Mail: email @roperandroper.com Web: www.roperandroper.com Satellite Offices in Palatka, Florida Pursuant to your recent request, the following is my legal opinion with regard to coverage by Public Risk Management of Florida ( "PRM ") under the PRM Coverage Document for the coverage period beginning October 1, 2006 and expiring April 1, 2008 for automobile liability, garagekeepers legal liability, and automobile no -fault claims by PRM Members, or their employees, involving "take home" vehicles owned by the PRM Member at a time and place where, or when, that PRM Member's employee operating the vehicle is off- -duty, or otherwise not acting within the course and scope of their governmental employment with the affected PRM Member. For the following reasons, it is my legal opinion that the PRM Coverage Document in question, as referenced above, does indeed provide automobile coverage in such situations, and for the various types of coverage referenced above. Please note that, with regard to automobile medical payments, and uninsured/underinsured motorist coverages, the same is specifically excluded, or "not covered" under Part I A, p. 8, of the PRM Coverage Document for any and all accidents involving PRM- Member owned, leased/hired, or other vehicles. Under Section III of the Coverage Document titled "Automobile Liability," there is broad automobile liability coverage afforded not only to the PRM governmental Member itself but also its employees for all owned or hired vehicles -- Paragraph III (A) states: The ASSOCIATION agrees, subject to the Coverage Document limitations, terms and conditions, to pay on behalf of the MEMBER for all sums which the MEMBER is obligated to 4b7884434'3 ROPER AND ROPER Mr. Ross Furry August 16, 2007 Page 2 11:12:43 a.m. 08 -17 -2007 3 /4 pay by reason of the liability imposed upon the MEMBER by law or assumed by the MEMBER under contract or agreement, including non -owned and hired automobiles, for damages direct or consequential, and expenses, all as more fully defined by the term ULTIMATE NET LOSS, arising out of any OCCURRENCE on account of BODILY INJURY including death at any time resulting therefrom, suffered or alleged to have been suffered by any person(s) or organization(s) and/or PROPERTY DAMAGE, arising out of the ownership, maintenance or use of any AUTOMOBILE, occurring during the COVERAGE PERIOD. (emphasis added) It is understood and agreed that Non -owned automobile liability coverage shall include those automobiles owned by any Official, Employee or Volunteer by the MEMBER, ONLY while the automobile(s) is used in the business or at the direction of the MEMBER. It is a condition of this Insuring Agreement that coverage provided within this Document shall be excess over any other valid and collectible insurance which may be in existence, as allowed by law. (emphasis added) With regard to the definition ofMEMBER as referenced in Section III (A) above, and also as to the following sections involving no -fault and garage keepers legal liability coverage (ie, Section III(b) through (e)), paragraph 2 of the subsequent Section III Definitions section, on a highly important and dispositive note, clarifies same as follows: MEMBER means not only the MEMBER as defined in the GENERAL COVERAGE DOCUMENT DEFINITIONS, but under this SECTION III also includes any person while using an owned or hired AUTOMOBILE with the permission of the MEMBER. (emphasis added). Due to the existence of this section, it appears clear that, as long as the off -duty employee has/had the permission of the PRM Member to be operating or using their owned, or hired, automobile, or that off -duty employee alternatively is operating a nongovernmental) -owned automobile at the direction of the PRM Member or pursuant to 4078844343 ROPER AND ROPER Mr. Ross Furry August 16, 2007 Page 3 11:13:01 a.m. 08 -17 -2007 4 /4 its business, then the PRM Coverage Document should afford coverage to that employee with regard to automobile liability, garage keeper's legal liability, and PIP (or "no- fault ") claims, It should likewise be noted that there is no explicit coverage exclusion for "take home" vehicles, or for off -duty employees operating same outside the course and scope of their governmental employment. Clearly, such coverage would only apply to "AUTOMOBILES" as defined in the general coverage document definitions, paragraph 2 (p. 17). Moreover, for automobile liability insurance purposes, the liability of PRM would still be limited to the "ULTIMATE NET LOSS" as defined in the general coverage document definitions, paragraph 22 (p. 20). In light of the above, I would strongly urge each PRM Member to investigate whether or not their entity currently has policies or procedures in place regarding "take- home" vehicles, and if not, that they take steps to immediately promulgate effective policies and procedures governing the use of "take- home" vehicles so as to limit or mitigate their exposures. I would be happy to assist in that regard if requested to do so. Thank you for your kind attention and professional consideration. I remain DAR:ddc DONOVAN A. OPER Roper & Roper, P.A. ATTORNEYS AT LAW 116 N. Park Avenue Apopka, Florida 32703 Donovan A. Roper, Esquire Teresa S. Roper, Esquire Andrew L Dayes, Esquire Heather Macre, Esquire Cindy Todd, Paralegal Paula Sontos, Paralegal June 21, 2007 Mr. Robert W. Zega Lee County Port Authority 2077 Bayside Parkway Ft. Myers, Florida 33901 Telephone: (407) 884 -9944 Facsimile : (407) 884 -4343 email@roperandroper.com roperandroper.com RE: Local governmental tort liability for "take home" vehicles owned by that local governmental entity Dear Mr. Zega: Pursuant to your request, the following is an explanation of the current state of the law in the State of Florida for "take- home" motor vehicles which are owned by a local governmental entity in the State of Florida (as recognized under Fla. Stat. Section 768.28) but which that local governmental entity allows its off -duty employees to utilize during off duty times, including but not limited to driving to work, or driving home from work. Please note that the state of the case law has radically changed recently, in fact since our last telephone conversation, as evidenced by the June 6, 2007 reversal by the Fourth District Court of Appeal of its prior decision in the case of Garcia v. City of Hollywood, 948 So.2d 1000 on February 21, 2007; please also note that, due to the fact that the time periods for filing motions for rehearing in the Garcia case have not yet expired, their June 6, 2007 opinion is not yet final. Notwithstanding that consideration, we can fairly predict that the June 6, 2007 opinion will indeed be the final one from that District Court of Appeal, and possibly one in which the non - prevailing plaintiff and her parents will appeal to the Florida Supreme Court. I have taken the liberty of enclosing a copy of the June 6, 2007 opinion in Garcia , which can be found at 2007 Westlaw 1610156, and /or 32 Fla. Law Weekly D1442. Section 768.28, Florida Statutes, which waives sovereign immunity in certain instances, only waives that sovereign immunity as to a state, or local governmental, employee who is "acting within the scope of his office of employment." Rabideau v. State, 391 So.2d 283 (Fla. 1 DCA 1980), affirmed 409 So.2d 1045 (Fla.1982). An employee's conduct is within the scope of his employment only if: 1) it is the kind he is employed to perform; 2) it Mr. Robert W. Zega June 21, 2007 Page 2 occurs substantially within the time and space limits of the employment; and 3) it was activated at least in part by a purpose to serve the master. Id., quoting from Morrison Motor Co. v. Manheim Services Corp., 346 So.2d 102 (Fla. 2d DCA 1977); see also Craft v John Sirounis & Sons, 575 So.2d 795 (Fla. 4`h DCA 1991). It is very important to note that the Florida Supreme Court case of Rabideau v. State, 409 So.2d 1045 (Fla. 1982) answered a certified question posed by the First District Court of Appeal to it, namely whether Fla. Stat. Section 768.28 makes the dangerous instrumentality doctrine applicable to the State (or in turn political subdivisions of the State of Florida), in the negative. As a result, it is vital to first understand that civil liability against Florida governmental entities cannot be imposed based upon the fact that it owns /owned the "take- home" vehicle (ie, based on the dangerous instrumentality doctrine); instead, the ONLY basis for the imposition of civil liability is via the respondeat superior doctrine, ie, when that employee is acting within the course and scope of their employment. The most recent case applying the principles of law contained in Rabideau and Morrison Motor Co., again is Garcia v. City of Hollywood, 2007 WL 1610156 (Fla. 4th DCA, June 6, 2007). In Garcia, Sergeant Norris Redding ( "Sergeant Redding "), was driving to the police station, in a marked "take- home" vehicle owned by his employer, the City. Sergeant Redding testified that the "take- home" policy provided that the vehicle could be driven to and from work. On the morning of the accident, Sergeant Redding was driving to the police station from home on the route that he had been taking on a daily basis for five or six years. Sergeant Redding's shift was to begin at 7 a.m. and he was going in one hour early that morning to study for the Lieutenant's exam which was to take place several months later. As he was driving that morning, he struck and seriously injured the minor Garcia as she attempted to cross a roadway in an effort to reach her school bus. The vehicle "take- home" policy was part of the Collective Bargaining Agreement between the Broward County PBA and the City which provided in part that the purpose of the vehicle "take- home" policy was to provide the appearance of additional police presence. Sergeant Redding's supervisor, Major Frank McGarry, testified that "take- home" vehicles are part of the City's employment package and are "only permitted to be used portal to portal or for off -duty details." McGarry testified that if a police officer is going to or from home in a police vehicle and witnesses a crime being committed, the officer must stop and take action. The officer must also be dressed in uniform and armed when operating a police vehicle. Mr. Robert W. Zega June 21, 2007 Page 3 Garcia asserted that a jury issue existed regarding the "course and scope of employment" because (1) at the time of the accident, Sergeant Redding was operating a vehicle provided to him by his employer to be used only for transportation to and from work, (2) the "take- home" vehicle was part of the City's employment package, and (3) Sergeant Redding was required to be in uniform while operating the vehicle. The City argued in response that the trial court properly granted its motion for summary judgment as a matter of law because the uncontradicted testimony established that Sergeant Redding had yet to begin work when the accident occurred and was merely driving to the police station an hour before his shift began to study for an exam prior to beginning work. The City noted that although Sergeant Redding was driving a City -owned police vehicle, the Florida Supreme Court has held that our waiver of sovereign immunity statute, Section 768.28(1), Florida Statutes (2004), does not waive sovereign immunity under the dangerous instrumentality doctrine. Rabideau v.. State, 409 So.2d 1045, 1046 (F1a.1982) ( "twenty- four -hour assignment of a state -owned vehicle to a state employee does not enlarge state liability under section 768.28 to include acts committed outside the employee's scope of employment "). The Garcia court reasoned: In Foremost Dairies, Inc. v. Godwin, 26 So.2d 773 (Fla.1946), a claimant sued a corporation for the negligence of an employee who injured the claimant while driving a car to work which the employee owned. The corporation paid for fuel and repairs. The claimant recovered a judgment on the theory that the driver was engaged in the business of the corporation at the time of the accident, but the Florida Supreme Court reversed, holding that an employee, "merely going to or from work in his own car," is not in the course of his employment as a matter of law. Id. at 774 (quoting Bourus v. Hagen et al., 192 Wash. 588 (Wash.1937)). In Everett Ford Co. v. Laney, 189 So.2d 877 (Fla.1966), an employee who worked irregular hours was returning to work after the office was closed, but had forgotten her key. While driving home to obtain her key, she was involved in an accident. Mr. Robert W. Zega June 21, 2007 Page 4 Our supreme court held that she was not within the scope of her employment when the accident occurred, even though this was not the normal time to drive to work. Id. at 878. The Garcia Court found additional support for the conclusion that Sergeant Redding was not within the course and scope of his employment at the time of the accident in Palm Beach County Sheriffs Office v. Ginn, 570 So.2d 1059 (Fla. 1st DCA 1990) and further explained: In Ginn, the First District reversed the order of the judge of compensation claims which found that the injuries of the claimant law enforcement officer were incurred at a time when the claimant was acting within the course and scope of his employment. Id. at 1060. The claimant, a Palm Beach County deputy sheriff, was off -duty and on a personal errand within Palm Beach County when he was injured in an automobile accident. Id. As a fringe benefit of his employment, he had been provided with a sheriffs office vehicle, which he was allowed to use on personal business and which he was driving at the time of the accident. Id. Prior to the accident, claimant had been monitoring the police radio in the vehicle, in the event that he might be called on duty to assist with some law enforcement matter. Id. Additionally, claimant was wearing a beeper at the time of the accident, which he was required to possess and monitor at all times as a member of the sheriffs office emergency field force. Id. In finding that the claimant was not acting within the course his employment, the First District held: The fact that a law enforcement officer is on call for duty and has a police radio and other indicia of his authority in his possession is not dispositive in determining whether an off -duty officer is acting within the course of his employment. Rather, the issue, pursuant to the provisions of Section 440.091, is whether the officer is carrying out his primary responsibility, which is the "prevention or detection of crime or the enforcement of the penal, criminal, traffic, or highway laws of the state." Mr. Robert W. Zega June 21, 2007 Page 5 The court concluded that although the claimant was fully prepared to be called on duty, he was not actually on duty when the accident occurred. Id. at 1061. He was not in the process of carrying out any "primary responsibility" as delineated by Section 440.091, Florida Statutes. Id. The Garcia court similarly held that, at the time of the accident, Sergeant Redding was not in the process of carrying out a "primary responsibility" of his job as a police officer. He was not engaged in the "prevention or detection of crime or the enforcement of the penal, criminal, traffic, or highway laws of the State." Rather, at the time of the accident, which occurred around 5:57 a.m., Redding was off -duty and made the personal decision to go to the police station an hour before his shift started at 7:00 a.m. to study for an upcoming Lieutenant's exam. He was not furthering any interest of his employer or performing any duties of his employment. He was simply in transit to the police station an hour before he was required to report for work for the personal reason of studying for the Lieutenant's exam. The Garcia court on June 6, 2007 affirmed the entry of summary judgment on behalf of the City holding that Sergeant Redding was not in the course and scope of his employment with the City of Hollywood, and therefore the City was not liable as a matter of law ; by doing so, they reversed their prior decision on February 21, 2007 holding that it was a jury issue (not a summary judgment issue to be resolved by a trial judge only) as to whether or not Sgt. Redding was acting within the course and scope of his employment under the three -part Craft v. Sirounis test as he was on his way to work, in uniform in a marked police cruiser on his way to prepare ahead of his work shift for a Sergeant's exam. As a result of this new case law, which again is not final for the next week or so, trial courts will probably grant summary judgment in favor of local governmental employers in civil lawsuits in which there is no genuine issue of material fact in opposition to: (1) the proposition that the conduct of the off -duty employee (police officer or otherwise) at the time of the motor vehicle accident was not the type of conduct that he /she was hired to perform; (2) the proposition that such conduct on the part of the off -duty employee did not occur within the time and spaced limits authorized or required by the work to be performed; and (3) the proposition that this conduct was not activated by a purpose to serve the employer. Mr. Robert W. Zega June 21, 2007 Page 6 I hope that I have adequately addressed each of your concerns on this matter; however, please feel free to contact me if you have any questions or concerns regarding the above. With best regards, I remain Signed in Mr. Roper's absence to avoid delay. DAR:cwh Enclosure cc: Frank Shore, PRM Ross Furry, PRM Very truly yours, //'2`0i2 &v� Asa? R DONOVAN A. ROPER Westlaw. - -- So.2d -- - - -- So.2d - - - -, 2007 WL 1610156 (Fla.App. 4 Dist.), 32 Fla. L. Weekly D1442 (Cite as: -- So.2d - - -) H Garcia v. City of Hollywood Fla.App. 4 Dist.,2007. Only the Westlaw citation is currently available. NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. District Court of Appeal of Florida,Fourth District. Rocio GARCIA, a minor, by and through her parent and best friend, Laura Garcia, and Laura Garcia and Armando Garcia, her parents, Appellants, v. CITY OF HOLLYWOOD, a political subdivision of the State of Florida, Appellee. No. 4D06 -970. June 6, 2007. Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; John T. Luzzo, Judge; L.T. Case No. 05- 009277 18. Arnold R. Ginsberg of Ginsberg & Schwartz, Miami, and Marcos A. Gonzalez, Coral Gables, for appellants. Daniel L. Abbott, City Attorney, and Tracy A. Lyons, Assistant City Attorney, Hollywood, for appellee. PER CURIAM. *1 We withdraw our opinion issued February 21, 2007 and replace it with this opinion. Rocio Garcia, a minor, by and through her parent and best friend, Laura Garcia, and Laura Garcia and Armando Garcia, her parents ( "Garcia "), appeal a final summary judgment entered in favor of the City of Hollywood ( "City"). This case involves personal injuries sustained by the minor, Rocio Garcia, who as a pedestrian was struck by a vehicle owned by the City and operated by one of its police officers, Sergeant Norris Redding ( "Sergeant Redding "). Page 2 of 4 Page 1 The trial court concluded that at the time of the accident in question, Sergeant Redding, who was driving to the police station, was not in the course and scope of his employment with the City, and therefore the City was not liable as a matter of law. We affirm. The accident in question occurred at approximately 6:00 a.m. on May 19, 2004. At that time, Sergeant Redding was driving to the police station in a marked "take- home" vehicle owned by his employer, the City. Sergeant Redding testified that the "take- home" policy provided that the vehicle could be driven to and from work. On the morning of the accident, Sergeant Redding was driving to the police station from home on the route that he had been taking on a daily basis for five or six years. Sergeant Redding's shift was to begin at 7 a.m. and he was going in one hour early that morning to study for the Lieutenant's exam which was to take place several months later. As he was driving that morning, he struck and seriously injured the minor Garcia as she attempted to cross a roadway in an effort to reach her school bus. The vehicle "take- home" policy was part of the Collective Bargaining Agreement between the Broward County PBA and the City which provided in part that the purpose of the vehicle "take- home" policy was to provide the appearance of additional police presence. Sergeant Redding's supervisor, Major Frank McGarry, testified that "take- home" vehicles are part of the City's employment package and are "only permitted to be used portal to portal or for off -duty details." McGarry testified that if a police officer is going to or from home in a police vehicle and witnesses a crime being committed, the officer must stop and take action. The officer must also be dressed in uniform and armed when operating a police vehicle. Garcia asserts a jury issue exists regarding the " course and scope of employment" because (1) at the time of the accident, Sergeant Redding was © 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works. http: / /web2.westlaw. com/print/printstream. aspx ?prft =HTMLE &destination =atp& sv= Split... 6/22/2007 So.2d -- - - -- So.2d - - - -, 2007 WL 1610156 (Fla.App. 4 Dist.), 32 Fla. L. Weekly D1442 (Cite as: -- So.2d - - -) operating a vehicle provided to him by his employer to be used only for transportation to and from work, (2) the "take- home" vehicle was part of the City's employment package, and (3) Sergeant Redding was required to be in uniform while operating the vehicle. The City argues in response that the trial court properly granted its motion for summary judgment as a matter of law because the uncontradicted testimony established that Sergeant Redding had yet to begin work when the accident occurred and was merely driving to the police station an hour before his shift began to study for an exam prior to beginning work. The City notes that although Sergeant Redding was driving a City-owned police vehicle, the Florida Supreme Court has held that our waiver of sovereign immunity statute, section 768.28(1), Florida Statutes (2004), does not waive sovereign immunity under the dangerous instrumentality doctrine. Rabideau v.. State, 409 So.2d 1045, 1046 (Fla.1982) ( "twenty- four -hour assignment of a state -owned vehicle to a state employee does not enlarge state liability under section 768.28 to include acts committed outside the employee's scope of employment "). *2 In Foremost Dairies, Inc. v. Godwin, 26 So.2d 773 (Fla.1946), a claimant sued a corporation for the negligence of an employee who injured the claimant while driving a car to work which the employee owned. The corporation paid for fuel and repairs. The claimant recovered a judgment on the theory that the driver was engaged in the business of the corporation at the time of the accident, but the Florida Supreme Court reversed, holding that an employee, "merely going to or from work in his own car," is not in the course of his employment as a matter of law. Id. at 774 (quoting Bourus v. Hagen et al., 192 Wash. 588 (Wash.1937)). In Everett Ford Co. v. Laney, 189 So.2d 877 (F1a.1966), an employee who worked irregular hours was returning to work after the office was closed, but had forgotten her key. While driving home to obtain her key, she was involved in an accident. Our supreme court held that she was not within the scope of her employment when the accident occurred, even though this was not the normal time to drive to work. Id. at 878. Page 3 of 4 Page 2 We find additional support for the conclusion that Sergeant Redding was not within the course and scope of his employment at the time of the accident in Palm Beach County Sheriffs Office v. Ginn, 570 So.2d 1059 (Fla. 1st DCA 1990). In Ginn, the First District reversed the order of the judge of compensation claims which found that the injuries of the claimant law enforcement officer were incurred at a time when the claimant was acting within the course and scope of his employment. Id. at 1060. The claimant, a Palm Beach County deputy sheriff, was off -duty and on a personal errand within Palm Beach County when he was injured in an automobile accident. Id. As a fringe benefit of his employment, he had been provided with a sheriffs office vehicle, which he was allowed to use on personal business and which he was driving at the time of the accident. Id. Prior to the accident, claimant had been monitoring the police radio in the vehicle, in the event that he might be called on duty to assist with some law enforcement matter. Id. Additionally, claimant was wearing a beeper at the time of the accident, which he was required to possess and monitor at all times as a member of the sheriffs office emergency field force. Id. In finding that the claimant was not acting within the course his employment, the First District held: The fact that a law enforcement officer is on call for duty and has a police radio and other indicia of his authority in his possession is not dispositive in determining whether an off -duty officer is acting within the course of his employment. Rather, the issue, pursuant to the provisions of Section 440.091, is whether the officer is carrying out his primary responsibility, which is the "prevention or detection of crime or the enforcement of the penal, criminal, traffic, or highway laws of the state." Id. The court concluded that although the claimant was fully prepared to be called on duty, he was not actually on duty when the accident occurred. Id. at 1061. He was not in the process of carrying out any "primary responsibility" as delineated by Section 440.091, Florida Statutes. Id. *3 Similarly, at the time of the accident, Sergeant Redding was not in the process of carrying out a " primary responsibility" of his job as a police officer. He was not engaged in the "prevention or © 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works. httn• / /wph) wpmtlaw cnm/ mint /nrintstream.asnx ?nrft =HTMLE &destination= atp &sv= Split... 6/22/2007 Page 4 of 4 So.2d - Page 3 So.2d - - - -, 2007 WL 1610156 (Fla.App. 4 Dist.), 32 Fla. L. Weekly D1442 (Cite as: — So.2d - -) detection of crime or the enforcement of the penal, criminal, traffic, or highway laws of the State." Rather, at the time of the accident, which occurred around 5:57 a.m., Redding was off -duty and made the personal decision to go to the police station an hour before his shift started at 7:00 a.m. to study for an upcoming Lieutenant's exam. He was not furthering any interest of his employer or performing any duties of his employment. He was simply in transit to the police station an hour before he was required to report for work for the personal reason of studying for the Lieutenant's exam. Affirmed. GUNTHER, POLEN and HAZOURI, JJ., concur. Fla.App. 4 Dist.,2007. Garcia v. City of Hollywood So.2d - - - -, 2007 WL 1610156 (Fla.App. 4 Dist.), 32 Fla. L. Weekly D1442 END OF DOCUMENT © 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works. httn: / /web2.westlaw. con /Drintlnrintstream.asnx ?nrft =HTMLE &destination= atp &sv= Split... 6/22/2007 A PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING SEPTEMBER 14, 2007 8. Board Member Items REGULAR AGENDA SUMMARY John Litton, Chairperson A. Lee County Port Authority — Request to Withdraw 3/31/08 At the May Board Meeting, By -Laws were amended requiring members to provide written notice to withdraw at least one year prior to the end of the policy year. Policy year begins 4/1/08 so notice must be received by 3/31/08. Prior to the change from fiscal year to policy year, members had until 9/30/07 to notify PRM of their intent to withdraw. LCPA is requesting Board approval for any interested members submitting their notice to withdraw by 9/30/07 to become effective on March 31, 2008, as long as the member completely exercises the remaining termination requirements. See attached letter. Attachment: Page 4 of May 17, 2007 Meeting Minutes with Board action. Board Action: _Approved Denied Deferred Other B. Location of Future Annual Conference The next Board Meeting will be held on December 14, 2007, at the Terrace Hotel in Lakeland. Public Comment: Discussion must be limited to a maximum of five (5) minutes per person. Adjourn LEE COUNTY PORT AUTHORITY ROBERT M. BALL, A.A.E. EXECUTIVE DIRECTOR DAVID M. OWEN PORT AUTHORITY ATTORNEY BOARD OF PORT COMMISSIONERS A. BRIAN BIGELOW TAMMY HALL BOB JANES RAY JUDAH FRANK MANN July 30, 2007 Mr. Ross Furry Executive Director Public Risk Management 2424 Hancock Bridge Parkway, Ste.203 Fort Myers, FL 33903 Dear Mr. Furry: Direct Dial: Fax: (239) 590 -4500 (239) 590-4595 MIt3 ?[2 It was a pleasure seeing you at our past Joint Board meeting on June 27, 2007. Thank you again for your time and for a very nice presentation. As you know, the Lee County Port Authority (Authority) is currently evaluating its insurance program. Clearly PRM has been a very good program for the Authority since joining in 1989. As you are aware however, conditions at the Authority have changed significantly since 1989. Not only has airport grown at significant rate, we have also moved into a brand new, state -of -the -art facility. Due to our continued growth and the obvious changes in the insurance market, it is time for the Authority to re- evaluate its insurance program, including but not limited to: self - insurance; obtaining our own independent insurance policies and /or a combination thereof. Although our preference would be to continue our participation in the PRM program, we can only do so if it makes financial sense. Prior to the by -law changes, we had until September 30, 2007, to decide if we intended to give PRM notice of termination that could ultimately be effective October 1, 2008. As a result of the recent by -law changes will the PRM Board accept notice from a member regarding their intent to terminate on or before September 30, 2007, and as such, terminating their membership effective March 31, 2008? I have been unable to determine if during the first year of the recently adopted by -law changes, if this was addressed. We request the PRM Board permit members (that is, any interested) to submit notice of intent to terminate by September 30, 2007, becoming effective on March 31, 2008 — should the member completely exercise the remaining termination requirements. SOUTHWEST FLORIDA INTERNATIONAL AIRPORT 11000 Terminal Access Road, Suite 8671. Fort Myers, Florida 33913 -8899 www.flylcpa.com Mr. Ross Furry Executive Director Public Risk Management July 30, 2007 Page 2 I hope that you do not take this request as non - support of the recent by -law changes. I applaud PRM for making these changes and agree that this change should benefit members in the long term. We appreciate your consideration and willingness to work with us in determining an equitable resolution to this issue. Sincerely, LEE COUNTY PORT AUTHORITY Benjamin . Siegel Division Director - Administration cc: Robert M. Ball, Executive Director Gene P. Meyers, Administration Pamela Conner, General Services Robert Zega, Risk/Training Development John Litton, PRM Board Chairman Article 9 — Finances and Risk Management Pool Amendment to Article 9.2.Budget — Change fiscal year to policy year. Change date to adopt a final budget from August 1 to February 1 to coincide with policy year. Amendment to Article 9.4. Budget Amendments — Change fiscal year to policy year. Article 10 — Excess Insurance Amendment to Article 10.4. Losses — Change fiscal year to policy year. Article 11 — Obligations of Members Amendment to Article 11.1.7.1. — Change date to November 1 and change fiscal year to policy year. Article 14 — Settlements Amendment to Article 14.1 Settlement /Advance Notice — Change settlement amount from $5,000 to $10,000. Mr. Boyle made a motion to approve the By -Laws changes. The motion was seconded by Wayne O'Neal and it was approved by majority vote with one opposed (Lee County Port Authority). In moving the date for giving notice to withdraw from the Pool from October 1 to April 1, a determination was needed by the Board on how to proceed with those members submitting their intent to withdraw as of 10/1/08. Today's approved changes to the By -Laws require members to remain in the Pool until 4/1/09. A motion was made by Mr. Drury that any member who gives notice to withdraw from the Pool, their notice will be effective for the April 1, 2009 policy periods. Mr. Boyle seconded the motion and it was approved by majority vote with two opposed (Lee County Port Authority and City of Clewiston). 6. Broker's Report A. Property Proposal for 10/1/07 thru 4/1/08 — Greg Butterfield was accompanied by Suzanne Brandt, CRC, and Mike Berend, RPS, to discuss a proposed extension of the property program to 4/1/08. The broker had incorrectly informed the Board at the March meeting that the Citizens Assessment Fee would not be charged. However, the proposal is an extension to the 2006 program, and the 6.84% Citizens fee would be assessed. With a 20% discount currently provided by the carriers, the total extension premium is $5,570,914 for $1.825 billion of 4 o CD -I CD (I) C Ca v Q° E• --I 3 Q) X lD CD Cn O Q) W CJ1 rn CO CJ' W 69 Cfl O W O o 69 CO 41, CO CA OJ W N co N N O W cri W O N N O N O O O CO ▪ EA EA CJJ CO W O 0) -CO w o w SSa1 %9.0Z m x CD 7 CA Using the updated values reported: ale i lenuuv O CA O O -I 71 -D —I - rn cO i m S?oc' (D (n3 CD $y - 3 N4 w?6•� CD N 0. • Q. V) — a O z a 0 N lD -, Q CD < O N N o N c E Cn o N (=D co N � m (D �, m X -0 ( NJ ,can _c 1 p (D o 3 5. VI co _. O 7 _' E• n N _ ON000a " 3 m io • W O N N A W 3 O --, CA CD O CD < W Q n N N CT N. fD C X, Q. 7 Cp a) C Cn C cn C7 !D CA (D * Op O. ^' < o 69 3 N g' ° CD (Q N m O • = CD °' 01 s • CO O N= Q -i O EA -co C) 2 � O •< O Z O 07 al O (/f W W O N y o i (n O (0 "" N - N O N S J (�D C 0 0 0 0 Z O (D C Ca -1) m 7 Cn CD _CD. CD 3 c O Qi c) Fa 3 D g= 0 —I < O lo _ v Z _ (0 0 n▪ w z a) a) 2 CO 00 0 m O (D -CD ---.1 -1 C N a 0 W 0 CT CO r cD (D CD (p (D N Q 0_ N ▪ oo 0 ° 9) ° C `D 0 3 Q E c '-I 3 (' in 0 COMPARISON OF EXTENSION QUOTED SSa-1 %Z01. 2138W31d3S N LOOZ 1VM3N321 AThdO2Id V Id CITY OF OKEECHOBEE PUBLIC RISK MANAGEMENT 12 MONTH ADJUSTMENTS 18 MONTH COSTS 12 Month Prepay Total 10/01/06 - 09/30/07 18 Month Balance Due 10/01 /07 - 03/31 /08 18 Month Total Program 10/01/06 - 03/31/08 Excess Insurance Premiums: Package Policy $29,096 $14,646 $43,742 Excess Property - $7,302,506 $48,439 $0 * $48,439 Excess Workers Compensation - $2,209,056 $9,764 $4,872 $14,636 Excess Liability $10,456 $5,238 $15,694 Boiler & Machinery $0 $0 $0 Total Excess Insurance Premiums: $97,755 $24,756 $122,511 Loss Fund Contribution @ 100 %: $156,175 $78,244 $234,419 Less: 5% Drug Free Credit ($7,809) ($3,912) ($11,721) Less: 3% Safety Credit ($4,685) ($2,348) ($7,033) Loss Fund After Credits: $143,681 $71,984 $215,665 Administration Costs: PRM Administration and Loss Prevention $8,653 $4,335 $12,988 Gallagher Bassett Fee $12,552 $6,201 $18,753 Workers' Compensation State Fees ** $5,352 $2,681 $8,033 Total Administration Costs: $26,557 $13,217 $39,774 Citizens Assessment $3,297 $0 * $3,297 TOTAL PRM COSTS: $271,290 $109,957 $381,247 Less Contribution from Surplus - $14,600 $0 - $14,600 Revised Total Cost: $256.690 $109,957 $366,647 5% Approved Drug -Free and 3% Approved Safety Credit Available - See PRM ** State Fees are subject to change by State of Florida * Please note: The Excess Property and the Citizen's Assessment amounts are not known at this time. These figures will be added to the 10/01/07 - 03/31/08 billing. RENEWAL NOTICE FOR CITY OF OKEECHOBEE PUBLIC RISK MANAGEMENT OF FLORIDA OCTOBER 1, 2007 - April 1, 2008 PRM Property Renewal: October 1, 2007 The Change From an October Renewal Date to an April Renewal Date and why the Property Coverage remained on an October Renewal Date in 2007 The Reason for the Change The idea was put forward in 2006 of changing the policy renewal date from October to April. The reason for this proposal was two fold. The main compelling reason was to move the renewal date out of the hurricane season. Since the hurricanes in 2004, carriers have pushed back the date they will offer quotes nearer and nearer to the renewal date. This causes problems both with being able to advise upcoming premiums for budget purposes, and with preparing and advising terms to PRM and the members in a timely fashion. In addition, if a hurricane appeared on the horizon carriers would suspend all work on renewal pricing until the hurricane had completed its path. The second reason was the ability to offer quotes to prospective members. Historically, entites out to bid required proposals before renewal terms were obtained from the carriers for PRM. This made it impossible for PRM to respond to bid situations in these circumstances. By moving the renewal date to April it means PRM's annual costs are known when entities are out to bid. PRM can now respond to requests for proposals and we expect PRM to start growing with carefully selected new members in the coming year. Why the Property Staved at an October Renewal Date in 2007 2006 saw a constriction of the capacity available from property carriers due to restrictions imposed by the reinsurance market. The result was a reduction in the limits available for windstorm coverage and a huge increase in the premium charged for this coverage. The net effect was the emergence of two property industries. There was one property industry for non catastrophe accounts and one industry for catastrophe accounts. The catastrophe accounts were recognized as being windstorm prone areas from the Carolinas to Texas and those that fell into the recognized earthquake areas. Because of the restrictions imposed by the reinsurance marketplace, PRM was unable to obtain property quotes for more than a 12 month period. This meant the property had to stay on a twelve month policy period. Fortunately, in 2006 no hurricanes made landfall in the United States of America. The first time this had happened since 2001. This led to an increase in the capacity for windstorm coverage resulting in a subsequent reduction in windstorm premiums. The net effect of this is the acceptance of the marketplace to a 6 month policy to enable the property to join the rest of the PRM coverage's on an April renewal date. 2 RISK MANAGEMENT, LLC Who We Are World Risk Management, LLC (WRM) is an owner - driven insurance provider located in Orlando, Florida that excels in finding creative solutions to client's insurance and risk management needs. WRM provides valuable insurance protection to its clients with individualized services with a wide - ranging and comprehensive product offering. WRM employs a highly professional staff that has a proven record of identifying and satisfying client's needs. WRM's team commitment is reflected in a combined risk management knowledge and experience totalling over 40 years. What We Do WRM offers clients a thorough and meticulous insurance need analysis, plus delivers competitive cutting edge products and services from nationally recognized insurance carriers based on realistic and reasonable fee and /or commissions. WRM's dedicated executive team is recognized throughout the industry for their commitment to providing clients with prompt responses and solutions. Our Reputation WRM's management team has an industry wide reputation for professionalism, quality service, knowledge, and client involvement on a daily basis at all levels, plus a genuine commitment to protect and shield employees and property of public entity groups and other businesses. WRM believes in its ability to lead in the field of risk management and loss management and provide innovative solutions. Corporate Values World Risk Management strives to develop long -term partnerships with our clients to identify and implement the most beneficial means to finance their occupational and property risk insurance needs. Our commitment to teamwork, responsiveness, mutual respect and technical innovation is reflected in delivering industry- leading loss control, claims management and administrative services and solutions. WRM has a genuine and demonstrated commitment to protect and shield client exposures. The WRM executive team has developed a common understanding of key risk management issues, its history, its current environment, and future trends. Sharing our experience and common vision allows us to deliver services that are consistent with our philosophy and core business values. 3 MANAGEMENT TEAM WRM's dedicated executive management team has a vast array of knowledge, skills and familiarity in working with risk management issues and public entity pool accounts. WRM's executive team has a total of over 40 years experience in the public entity account business and are well positioned to offer their professional and business acumen to a vast array of potential clients. Michele Schaare, President/Managing Director, World Risk Management, has over 15 years experience in the public entity field. Ten of those 15 years was spent servicing a leading public entity pool account in Florida. Michele has extensive experience and administration skills in managing a team of insurance professionals. She has demonstrated over the years her dedication and skills in recruiting, hiring and retaining dedicated, licensed and well respected insurance professionals. Michele is proficient in compilation of underwriting data, marketing, negotiations and formal presentations to Pool groups and its members. Michele has also managed a portfolio of stand -alone Florida entity public entity accounts. Andy Cooper, Vice President, World Risk Management, has worked over 20 years in all different facets of the self insurance /pooling insurance field. He has extensive domestic and international experience in reinsurance, retail brokerage, negotiating terms and conditions, insurance ratings, brokering underwriting accounts, and placement of property and casualty insurance for pool groups. Andy has also worked in the London insurance market with Lloyd's of London syndicates and London insurance companies. Sonia Fatheree, Vice President of Account Services, World Risk Management, has over 20 years of commercial insurance experience. She had held various positions with different agencies in both Louisiana and Florida. She specializes in all aspects of public entity insurance with focus on reinsurance, property, liability, worker's compensation, employment practice liability, fidelity, and contract risk transfers. In addition to public entity insurance, Sonia is experienced in several other commercial industries. She has extensive experience in marketing and negotiating with carriers, as well as managerial experience within the insurance agency. Her attention to compliance and regulation within the insurance industry is invaluable to the clients that she serves to ensure that they are receiving professional, legal and accurate coverage. Sonia has a noted reputation among her peers for her client listening skills, and attention to detail that insures effective and reliable client insurance coverage purchased at the best possible price. 4 PUBLIC RISK MANAGEMENT OF FLORIDA Marketing Narrative PRM Property Renewal: October 1, 2007 Marketing Process After discussions with Ross Furry, PRM's Exective Director and Glenn Tobey, PRM's Insurance Advisor, the strategy for the property renewal was agreed upon. The main goals were a 6 month policy, to move to an April renewal date as previously explained, to reduce the premium rates and obtain more windstorm coverage. It was also decided that the layering on the property program needed to be reviewed and simplified if possible. The expiring structure had many layers with several carriers on most layers. It was agreed to reduce the number of layers as much as possible. At the same time we wanted to keep several carriers involved in each layer so no one market dominated the pricing or the terms and conditions. Other important goals were to eliminate coverage on a scheduled basis, thus doing away with the need for the margin clause endorsement. If this was not possible the goal was to increase the percentage in the margin clause to at least 20 %. We also targeted reducing the named windstorm deductible from the current 5% to 2% or 3 %. It was with these goals in place that we met with the wholesaler, CRC and several key carriers. Glenn Tobey set up meetings in Atlanta with Suzanne Brandt of CRC and some of the markets that have played an important role in the PRM property program over the years. Michele Schaare flew to Atlanta as well and, with Glenn Tobey, met with an alternative wholesale market. In early August Michele Schaare met with Suzanne Brandt at the Florida RIMS conference as well as some markets. In July Andy Cooper flew to London and met with the London broker who handles the London placement of the property program. During all of these meetings new markets were discussed and the goals for the renewal set out and explained. We have managed to expand the first layer above the PRM Coverage Document to $47.5m with four major carriers participating. Above that, the layering has been stretched to two $25m layers reaching the $100m in wind PRM has in the expiring program in just three layers. In structuring the different layers, many carriers worldwide were approached. This enabled us to position the carriers where they fit best in the different layers. Carriers have different appetites, some prefer to be placed lower down in the layers, others like to spread themselves as much as possible over the layers, and some will only be placed higher up. Over 15 carriers were approached that declined to quote These declinations were for a variety of reasons. They ranged from carriers not writing in Florida, to those not writing pools or municipalities. Some declined due to the size of PRM and some we did not use because they would not support the terms requested, such as the pricing or Blanket Coverage. Even with these declinations there were enough carriers available for us to choose which ones best fit the program. 5 PRM Property Renewal: October 1, 2007 Marketing Process (Cont'd) There is more capacity in the property market compared to last year, which has enabled us to obtain options up to $150m and $175m in wind. We also managed to obtain a significant reduction in the property rate over what was charged last year. Carriers were mindful of the losses PRM has suffered from hurricanes over the last few years. The losses total just over $74m from Charley, Frances, Jeanne & Wilma. Even with these losses they agreed to the reductions. It is also good to keep in mind that two Category 5 hurricanes formed and hit land during the property renewal this year. Even though they hit Mexico this still affects the global marketplace. Estimates so far are in the $1 to $2 billion for these two storms. This is a timely reminder of why changing the renewal date is vital because if the hurricanes had hit Florida the marketplace would be in turmoil right now, and renewal terms would more than likely not be forthcoming. The carriers have taken into account the increase in the values since last year. The values increased an average of 13% over last year which has increased the premium by the same percentage. Some of the carriers were not keen on issuing a 6 month policy, as the premium, when halved for 6 months, was below their minimum premium for the limits they were providing. However, ,,,, they agreed to the premium levels which is a testament to the PRM program and carriers desire to work with PRM and stay involved on the property. We did request a reduction in the windstorm percentage deductible, however it appears the marketplace is not ready for reductions at this time. We checked this with wholesalers other than CRC and determined this is an issue carriers will not move on for now. More importantly, the carriers have agreed to return to blanket coverage. This has eliminated the need for the margin clause endorsement. This does not remove the importance of the appraisals or the need for every member to check both the schedules carefully and the values set for each property. However, it means that if a catastrophe does occur then the margin clause will not be in place to limit coverage if the margin clause percentage would have been exceeded. In summary, we are very pleased that most of the goals set for the property renewal were obtained. The layers have been expanded and increased wind storm limits are quoted as options. Significant reductions in the rate were obtained, Blanket Coverage has been provided and a six month policy moving to an April renewal date will be issued. 6 PUBLIC RISK MANAGEMENT OF FLORIDA PROPOSED CARRIER RATINGS AND ADMITTED STATUS Proposed Carriers A.M. Best's Rating (09/10/07) Admitted /Non- Admitted Lexington Insurance Co A+ XV Non Admitted Westchester Surplus Lines Insurance Co A+ XI Non Admitted Lloyd's of London A XV Non Admitted Landmark American Insurance Co A XI Non Admitted Endurance American Specialty Insurance Co A- XV Non Admitted Essex Insurance Co A XIII Non Admitted Max Specialty Insurance Co A- XIII Non Admitted Columbia Casualty Co A XV Non Admitted Liberty Mutual Fire Insurance Co A XV Admitted Homeland Insurance Co A XV Non Admitted Arch Specialty Insurance Co A XV Non Admitted Ironshore Insurance Co A- XV Non Admitted Lancashire Insurance Co A- XII Non Admitted l`'" If the above indicates coverage is placed with a Non - Admitted carrier, the carrier is doing business in the state as a surplus lines or non - admitted carrier. As such, this carrier is not subject to the same regulations that apply to an admitted carrier nor do they participate in any insurance guarantee fund applicable to that state. 7 Guide to Best Ratings Rating Levels & Categories Level Category Level Category Level Category A + +, A+ Superior B, B- Fair D Poor A, A- Excellent C + +, C+ Marginal E Under Statutory Supervision B + +, B+ Very C, C- Weak F In Liquidation Good S Rating Suspended Financial Size Categories (In $000 of Reported Policyholders' Surplus Conditional Reserve Funds) FCS I Up to 1,000 FSC IX 250,000 To 500,000 FSC II 1,000 To 2,000 FSC X 500,000 To 750,000 FSC III 2,000 To 5,000 FSC XI 750,000 To 1,000,000 FSC IV 5,000 To 10,000 FSC XII 1,000,000 To 1,250,000 FSC V 10,000 To 25,000 FSC XIII 1,250,000 To 1,500,000 FSC VI 25,000 To 50,000 FSC 1,500,000 To 2,000,000 XIV FSC VII 50,000 To 100,000 FSC XV 2,000,000 Or More FSC VIII 100,000 To 250,000 Best Insurance Reports, published annually by A.M. Best Company, Inc., presents comprehensive reports on the financial position, history, and transactions of insurance companies operating in the United States and Canada. Companies licensed to do business in the United States are assigned a Best's Rating which attempts to measure the comparative position of the company or association against industry averages. Copies of the Best's Insurance Reports on the insurance companies are available upon your request. 8 PUBLIC RISK MANAGEMENT OF FLORIDA EXCESS PROPERTY LAYERING STRUCTURE $75M xs $100M (ALL RISK EXCL FLOOD & QUAKE) $25M p/o — Landmark American Insurance Co $25M p/o — Ironshore Insurance Co $10M p/o — Arch Specialty Insurance Co $2M p/o — Certain Underwriters Lloyd's of London $13M p/o — Lancashire Insurance Co $25M xs $75M (ALL RISK EXCL FLOOD & QUAKE) $9.5M p/o — Landmark American Insurance Co $5M p/o — Endurance American Specialty Insurance Co $5M p/o — Homeland Insurance Co of New York $3M p/o — Max Specialty Insurance Co $1.25M p/o — Columbia Casualty Co $1.25M p/o — Liberty Mutual Fire Insurance Co $25M xs $50M (ALL RISK EXCL FLOOD & QUAKE) $9.5M p/o — Certain Underwriters at Lloyd's of London $5M p/o — Endurance American Specialty Insurance Co $5M p/o — Essex Insurance Co $3M p/o — Max Specialty Insurance Co $1.25M p/o — Columbia Casualty Co $1.25M p/o — Liberty Mutual Fire Insurance Co $47.5M xs $2.5M (ALL RISK) $15M p.o — Lexington Insurance Co $15M p/o — Westchester Surplus Lines Insurance Co $10.5M p/o — Certain Underwriters at Lloyd's of London $7M p/o — Landmark American Insurance Co 9 CITY OF OKEECHOBEE PUBLIC RISK MANAGEMENT OF FLORIDA COVERAGE SUMMARY RECOMMENDED EXCESS PROPERTY Policy Period: 10/1/2007 — 4/01/08 for Excess Property Coverage Description: Property Insurance covers your interest against direct physical loss or damage by covered perils to property that you own or are required to insure. $200,000,000 Association Occurrence Limit is the maximum available for all members combined except for Named Windstorm which is sub - limited to $175,000,000 per occurrence. Limits $8,187,228 part of $1,993,602,929 Total Association Value Total Insurance Values: Blanket Limit: $200,000,000 All Other Perils - $175,000,000 Windstorm Association Self Insured Retention: $200,000 Member Maintenance Deductible: $1,000 Wind Retention: 5% of the affected building values for a named storm. Minimum $200,000 with no maximum Coverage Extensions Including But Not Limited to: • Special • No Coinsurance • Flood Sub limit - $50,000,000 Association Aggregate (Excess of the National Flood Insurance Program in Flood Zones "A" or "V ") • Earthquake Sub limit - $50,000,000 Association Aggregate • Replacement Cost: Building & Contents; Actual Cash Value - Automobiles • $2,000,000 Extra Expense & Business Interruption • Increased Cost of Construction - Building Ordinance - Included • Property in Transit Included • Includes Owned Property in Course of Construction (Owner's Builders Risk) • Electronic Data Processing • Valuable papers and Accounts Receivable - $10,000,000 Sub limit • Inland Marine - Contractors Equipment 10 PUBLIC RISK MANAGEMENT OF FLORIDA COVERAGE SUMMARY PROPERTY (Continued) Coverage Extensions Including But Not Limited to: • Employees Personal Property - $1,000/$25,000 Maximum • Employees Tools - $50,000- Subject to signed list of tools with their values, if more than $5,000 per employee • Fine Arts - $100,000 • Automatic Coverage Remainder of Policy Term Up to $5,000,000 - No Additional Premium • Automatic Coverage for APD - No Mid -Term Adjustments • Margin Clause (This is a summary only. Members should refer to the actual policies for terms and conditions.) 11 PUBLIC RISK MANAGEMENT OF FLORIDA WHAT IS NOT INCLUDED PROPERTY Mold Terrorism Property Losses of a Degenerative Nature (Wear, Tear, Deterioration) Uninsurable Excluded for Buildings valued Excess of $50,000,000 Uninsurable Rust Wet or Dry Rot Uninsurable Physical Damage to Aircraft Hull Coverage Available Physical Damage to Watercraft over 40 Feet Available by Endorsement Employee Tools Limited to $50,000 Per Occurrence (Higher Limits Available) Animals Uninsurable Land and Land Values Uninsurable +.r Streets, Roads, Bridges, Sea Walls, Sewer & Water Lines, Separate Inland Marine Coverage Outside Electrical T &D Lines PRM Trees, Shrubs, Bushes Normally Uninsurable War, Nuclear Uninsurable Boiler &Machinery Available on a separate PRM Master Policy Inventory Shortage Uninsurable New Construction /Additions Automatic Coverage Limited to $5,000,000 The First $1,000 of any Loss Member Maintenance Deductible Vacant Buildings covered at Actual Cash Value or Repair Cost. This is a summary only. Members should refer to the actual document for Terms & Conditions. 12 CITY OF OKEECHOBEE PUBLIC RISK MANAGEMENT OF FLORIDA PROPERTY EXPOSURES PROPERTY INFORMATION 2006/2007 2007/2008 Total Building Values 2,284,200 2,793,300 Total Contents Values 613,600 643,600 Declared (Property in the Open) 502,900 533,800 EDP (Hardware) 147,525 122,500 EDP (Software) 56,194 Inc! EDP (Extra Expense) 22,000 Ind Business Interruption Values /Extra Expense Values 2,000,000 2,000,000 Contractors' Equipment/Off Road Equipment 733,165 733,165 Automobile Values 710,185 1,128,126 Owned Builders Risk 0 0 Rental Values 7,000 7,000 Other Misc. Values 225,737 225,737 TOTAL INSURANCE VALUES 7,302,506 8,187,228 Total Property Exposure Increase: 12% 13 CITY OF OKEECHOBEE PUBLIC RISK MANAGEMENT OF FLORIDA MEMBER CONTRIBUTION BREAKDOWN PREMIUMS ARE DUE 9/24/07 OVERALL ASSOCIATION PROPERTY VALUES INCREASED 13.0% OVERALL ASSOCIATION RATE DECREASE WAS 28.6 %. YOUR ENTITY'S DECREASE PERCENTAGE SHOWN ABOVE IS A PERCENTAGE OF PREMIUM. THIS WILL DIFFER FROM THE ASSOCIATION'S RATE DECREASE DUE TO DIFFERENCES IN YOUR ENTITY'S TIV INCREASE OR DECREASE. 14 "AS IS " -$100M WIND COVERAGE & 51,736 39,090 24.4% 19,545 $200M ALL OTHER PERILS OPTION 1 - $150M WIND & 43,625 21,813 $200M ALL OTHER PERILS -� RECOMMENDED - $175M WIND & 45,002 22,501 $200M ALL OTHER PERILS OPTION 2 - $200M WIND & ALL OTHER 45,792 22,896 PERILS OVERALL ASSOCIATION PROPERTY VALUES INCREASED 13.0% OVERALL ASSOCIATION RATE DECREASE WAS 28.6 %. YOUR ENTITY'S DECREASE PERCENTAGE SHOWN ABOVE IS A PERCENTAGE OF PREMIUM. THIS WILL DIFFER FROM THE ASSOCIATION'S RATE DECREASE DUE TO DIFFERENCES IN YOUR ENTITY'S TIV INCREASE OR DECREASE. 14 PUBLIC RISK MANAGEMENT OF FLORIDA 3434 HANCOCK BRIDGE PARKWAY, SUITE 203 N. FT. MYERS, FL. 33903 Ph: 239 - 656 -4666 Memorandum DATE: September 26, 2007 TO: Board Members, Alternates & Contacts FROM: Judy Hearn, Assistant Executive Director Secretary, PRM Board of Directors RE: Summary of Board of Directors Meeting, September 14, 2007 * * * * * * * * * * * * * * * * * * * ** The following is a summary of motions passed at the Board of Directors Meeting held on September 14, 2007 in Lakeland, Florida. The official meeting minutes will be presented for approval at the next scheduled Board of Directors Meeting. Motions Passed Consent Agenda: Approved May 17, 2007 Board Meeting Minutes Approved Treasurer's Report as of June 30, 2007 Ratified Election of Officers from May 17, 2007 Board Meeting Regular Agenda: Approved renewal of Insurance Advisor Contract for the term October 1, 2007/08 at $216,000 annually. Approved renewal of General Counsel Contract for the term October 1, 2007/08 at a monthly retainer fee of $1500. Approved the purchase of additional $175,000,000 Windstorm Coverage and $200,000,000 all other perils for the period October 1, 2007 — April 1, 2008. Approved motion to opt in the Arthur J. Gallagher Entities Class Action Lawsuit.